Advice: xfx 7950gt caught fire...

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Hola everyone - got a problem and hoped to get some advice or thoughts...

So I recently purchased some components to build a computer - Asus m2n32 sli deluxe, amd 64 x2 6000, 2 gig ram, xfx 7950gt, X-FI xtreme gamer, new case and other things (hard drive, PSU and dvd drive from previous machine - none of which are over a year old).

Well I put the system together and it ran perfect for about a week and half. This past weekend I was changing the case fans and replacing the heatsink to improve airflow. When I was done, I hit the power switch and nada. I checked the connections and everything, finding no problems. I spoke with a neighbor who advised I should try a new PSU. So I go grab one at the store (Antec 500 watt), go home and plug everything in...

I push the power button and FLASH, I can see the small fire on the top of the video card and immediately shut it down. Ok so a chip on the video card was pretty much cooked off. And after attempting to use the hard drive on another computer, I discovered that a chip on the hard drive PCB was visibly melted. The strange thing is, I am pretty sure that I didn't even plug the new PSU to the hard drive (just the MB to see if I got a post)

What would be the most obvious source of this? The old PSU (which was not really powerful enough 430 watt)?

I already sent the video card back for a replacement, but I am afraid the MB, ram and CPU may also be fried. I am waiting for a friend to bring over his AMD rig so that we can test the components individually...

Any advice as to what could cause this would be most welcome...
 
This system could have been hit by a power surge, and "slightly" damaged components... after a week and a half, the damage worsened. The motherboards damaged voltage regulators probably took out the video card
 
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