Hmm, that must be extremely annoying. I've got two transformers on my machine - 500VA powering X motors and Z, 325VA on Y and 4th axis if in use. I only did it as I had a spare and thought it would be good to seperate the supply for X and Y so that if they both draw a high current at the same time (e.g. G0 X0Y , G0 X500 Y500) the voltage doesn't drop too much. Will also help if one goes bang, but they never even get warm so can't see that hapenning. Really odd that yours did since your drivers have overcurrent protection. What did you fuse did you use?

It'd be interesting to try rewinding/repairing the existing transformer. Depending on how many turns that arcing has destroyed you might be able to remove those turns and connect up the loose ends. Then switch it on with no load from a distance ... if it seems fine after a couple of minutes try measuring the voltage.