Examine the aluminum electrolytic capacitors, the small components that look like miniature beer cans. (They have two legs coming out of the bottom, though the legs may not be visible.) Their exposed tops have two lines crossing at the midpoint, so if a capacitor overheats or shorts, its top will burst or bulge. Some capacitors have a slight dome, but if there's a significant bulge or split in the top, it's likely that the capacitor or another component down the line has failed.
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Another diagnostic step is to use a voltage meter, preferably an autoranging one. But don't try this if you're not familiar with voltage hazards and electronic equipment. Plug in and turn on the equipment in question. Find where the DC power leads traverse from the power supply to the circuit board. Carefully touch the tip of the black negative lead to a ground point in the equipment--usually a metal frame or the metal outer covering of the power supply, if there is one. Insert the positive lead at the top of the wire connecting the power supply to the circuit board. You should touch the top half of the crimp in the connector wire.
Why not just pull off the connector and read directly from the power supply? Because many power supplies require an electrical resistance load, provided by the circuit board, to power up. This is especially true in PC and server power supplies: Without a load, they won't function. And measuring the output of a power supply without its load is almost worthless because the voltage will vary considerably and the readings you get won't resemble those taken under a resistance load.
Now read your voltage. In most cases, a black wire should have little or no reading. Other typical voltages for any nonblack wire range from 48 down to 1.1 or 3.3 volts (you typically get 5 volts, 12 volts or 3.3 volts, either negative or positive). As a rule, the higher the voltage, the more acceptable the variance. If you're measuring a device that's supposed to be 12 volts and it's 11.5 or 12.7, no big deal. A voltage variance that large on a 3.3-volt lead, however, would be a red flag.
Take a sniff of your hardware. Is there a burning, sick-sweet or acrid smell? A burning or acrid odor comes from plastics or insulation, and a sweet smell is usually burned resin flux, which is used to clean electronic components and let solder flow. Most circuit boards have a small amount of flux, and you can sometimes smell when it heats up or burns. Any unusual smells may indicate a failed component.