[Nathan Slingerland]

A smoking transformer could mean that something else in the circuit (outside of the transformer) is shorted and drawing too much current - causing a transformer winding to overheat. It's possible that the transformer is still good (hopefully it wasn't overheating for too long) - but you must at the very least check out the other components first.

If there is a problem further down the line then you'll only end up with a smoking replacement transformer.