How to diagnose electrical/plastic smell when switching on device?

I've bought second hand steering wheel (Guillemot Ferrari Force Feedback) on the local marketplace. The owner told me the adapter is missing, so I've bought a universal adapter.

I didn't know the correct voltage so I started as low as possible to see whether the device will work. The adapter only went up to 12V, so that's where I stopped. A strange smell appeared so I immediately shut it off. I'm not sure whether I broke the device by this procedure or it was already broken but just showing it's signs on this voltage.

Later I found out online the exact specifications for the adapter (20V) and bought a new universal adapter. I tried again with the correct voltage and again get the burning smell.

After that I opened up the wheel to see if there was a fuse or some obvious component damage. The only thing I notice is one of the capacitors is (very) slightly bulged, but I find it hard to tell whether this is abnormal or not. It's not exploded or any leakage.

I'm a bit hesitant to keep putting power on the circuit because of the smell and a fear of breaking more.

How can I proceed in this case?

This is an image of the capacitor:

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Replace the capacitor, it has gone bad. Mouser electronic will carry it. RadioShack may also. Take a close up picture so hat it can be read. Examine all the caps for swelling and or leakage. There was a major run of knock off caps that got into lots of things around 2006-2009.

http://www.mouser.com/?gclid=CjwKEAjw8Jy...

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Thanks. I've ordered the capacitor and will give it a go!

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So I've replaced the capacitor, but the problem persists. After this I found out that one of the resistors is getting very hot, which is probably causing the smell. Not sure what is causing that though..

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You may need to go over it with a IR thermometer to find the offending components:

IR Thermometer

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Thanks for the suggestion. But I can actually feel the component getting too hot to touch, so I don't see the need for the IR thermometer. I guess it must be something causing to much current to flow trough the resistor.

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Robert Massa will be eternally grateful.
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