That spark you saw might have been the internal fuse in the PSU blowing. That is best case anyway. I would crack it open and check/replace the fuse inside that PSU with a same rated replacement.
Given that you were warned it was PSU issue and you quickly blew out a new one, it sounds more like something is quickly overloading the PSU, and it might be the motherboard itself, or a component on it. I would think a even a good fan could cause problems if someone connected it to the wrong pins. I would just take things one by one and troubleshoot it as a PC, ignore any arcade machine elements.
Visually look over the motherboard and unplug every component to protect as much of the machine to help isolate what caused the problem and protect your other components as you work through it. Disconnect the hard drive, the ram, the usb connections, security chip, VGA connections the video card, etc. See if you can get a beep and sign of life, then one-by-one power down and try adding in a component. You should also be able to just plug in an old LCD as you get the main system to boot, so you don't have to juggle the element of the CRT at the same time.