Trouble installing new PSU - blue sparks, bangs, help!

[caravel]

The PSU is indeed "toast". There are some large transistors on the main board, if you hear a bang it's one of those. Bigger bangs with blue smoke and a horrible smell indicate that one of the larger condensors have "popped". In my experience PC World are a bunch of ....... You may have difficulty getting an exchange/refund, though hopefully not. What brand of PSU was it?

As the problem arose after putting the case lid back on, I thought I might have loosened a wire or something pushing the thing in. In particular, the wire connecting the front power button to the innards might have come loose, so I pressed that in. I also switch the amp on lead from 5A to 13A (as the new PSU says 500W 8A). I switched on the machine and there was a nasty blue flash from within the PSU and a small bang. Whists of smoke and pungent smell.

You say you may have loosened something. Connecting the power, hdd, speaker, etc jumpers to wrong pins can be disastrous. That could have been the cause, also I'm not sure why you switched the fuse, but I doubt that had anything to do with it. Once a PSU or the kettle lead fuse has blown though, it is inadvisable to try and connect it again. Hopefully your motherboard hasn't been damaged. Before you reconnect your old PSU you need to be absolutely certain that everything is connected ok inside, if you're unsure of what you're doing, you should defininitely get help.