Well it turns out it doesn't work with grounds shorted. At first I made measurements without any load on the channel so I thought everything was working. But if I put 12ohm load on the output, without shorting grounds, biased sine wave turns to zero, and with shorted grounds amplitude decreases greatly and negative half of the waveform disappears.
I attached pictures of output without load with grounds connected, and with 12ohm load with grounds connected.
EDIT: Turns out by playing around I killed the main IC. Installed a new one, problem persists, although it works the same with load now (Outputs nice sine wave, but DC biased.). Also if I try to short grounds now, display shows "power off" blinking, and amp doesn't work.