PSU fan will not spin whilst in computer. "Hot" smell comming from inside PC.

Banqu0

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Was Playing Empryrion last night when the computer suddenly powered off. It was not a proper shutdown, it just turned off. No errors or bluescreen. Nothing in event viewer except for a Kernel power error indicating an unexpected shutdown. Computer did this a few more times. I began to notice that smell of electronics that are starting to cook. No smoke or anything, just that kind of melted plastic smell. Looked inside the case and noticed that the PSU fan was not spinning. I shutdown the computer and this morning pulled it apart. Can't really tell what part was hot because the smell is gone. Right now, the PSU is jumped, sitting on the table and the fan is spinning. Nothing looks melted anywhere. CPU reached 64 degrees during gaming, but that doesn't seem all that hot, so i don't think that's it.

Kind of odd the PSU fan would not spin while in the computer. What could be the cause of this?

EDIT: PSU is Seasonic S12II
 

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I did read that about the fan only spinning under load, but the PSU fan is spinning right now as it sits on the table
 

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Being that it's much cooler in the room right now then it was last night, and certainly moreso than in the case, I suspect that's not it. In any case, it's not under load at the moment, so perhaps it's an issue with one of the rails?
 

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UPDATE: I cleaned out the CPU and GPU heatsinks. Not much dust in there. Put Humpty back together again and looked at idle temps with HWinfo. CPU hovering at 31 degrees. Did a prime95 stress test for about 5 minutes, then the CPU hit 60 (I have a stock cooler). The computer did not loose power, but there did seem to be a fair amount of heat coming from the PSU. The fan is spinning though.

I want to test further but.... I'm afraid........