Thanks for the background. Yes a significant surge could damage a transformer…any over-voltage/over-current situation could potentially damage electronic components.
Fuses on secondary side of a power transformer protect everything downstream of the transformer. They are current dependent and it makes sense to put them on the secondary side where the stepped-down AC rails are isolated by the transformer. So the fuses you see have nothing to do with protecting the power transformer from some massive over voltage or current situation. That’s what a surge protector is for. The power transformer can handle much more current than the device can demand, plus that demand is fused anyway. But that’s to protect everything downstream of the fuse, Anyway, it’s a bit baffling what might have happened, but if something causes enough heat in a transformer the varnish on the windings can break down causing leakage between windings, making more heat, and away we go.
Do this though, let’s make sure what you’re smelling is the transformer for sure…pull all the fuses to isolate the transformer and then power it up…if you smell hot electrical or see smoke shut it off. Proceed at your own risk, I’m not liable for any damage to you or your equipment, I’m only making a suggestion for a way to verify the transformer is roached, you acting on the suggestion is up to you. But if you do, report back