Yeah, pretty much.
My dad's PSU blew out a voltage regulator on the 3.3v rail, causing it to hit spikes of over 7v. the CPU was an OLD socket A Athlon chip, so their regulators are built onto the motherboard. Well, the memory was fine (Actually I have it in my system now) but the cpu and motherboard were trashed. it got so bad that for some reason, if you simply rebooted the computer a few times, the windows OS would become corrupt and no longer boot. (but if you kept it on all the time it would keep working, weird eh?) I decided to basically scrap it and build him a decent socket 754 2ghz sempron system (which was way better than the old setup)
Computers are pretty sensitive to voltage spikes. I wonder if it's possible that his PSU is failing and blew out the regulator circuits.
I learned something interesting on my computer though. if the CPU fan isn't plugged in all the way, it shorts out a circuit, causing a tiny resistor to glow red hot. It happened when I first put it together. that was a bit over a year ago. I'm going to guess it was the fan controller circuit since it never throttles the fan down like it's supposed to.
sorry for the rambling.
Anyways, your computer is toast, it's time to give it the ol' heave ho and build yourself a new rig.