Plug a keyboard into it, see if you experience the same input lag controlling the game with the keyboard. Run one of the cave mame games, you should be able to tell if there's any difference, leave the fastio connected also... sit keyboard on your lap, move ship with keyboard, move ship with joystick, compare.
A lot of people also update their cab monitors with those cheap LG 32" screens, nice colours but they have awful input lag.
Don't use usf4 (all versions) for input testing, they have a video wrapper that will introduce lag on the oem X3 cpu/gpu. Always use TTX1 TetrisGM3 (shirase or master mode) or TTX3 kof 14 for a better input lag test, pick K in kof 14 and throw qcf light punch.