Tested the PSU, assembled, triple-checked the connectors, connected the power, switched on the PSU (not the comp) - all the LEDs went blinking with the intervals of 2 seconds. Try to switch it on - no video, the fans won't start, LEDs keep blinking.
So I unplug everything, check again, check the RAM, the power cord - looks okay. Connect everything, switch on the PSU, suddenly I hear loud "pop" and the PSU starts smoking. So I unplug everything and carry the whole system back to the shop, 'cause I don't have another 350+ watts PSU with 8-pin connector and am pretty upset now.
While testing it in the shop, we find out by elimination method that the LEDs keep blinking unless you remove the processor. The PSU was found to be defective - the 8-pin doesn't give out the correct voltage, the other boards didn't start with it, too.
So we tried to start the board with other PSUs, this time LEDs don't blink even with the processor installed, but still no video output, though the fans start up. Graphics card 100% tested and working, plus we tried different ones. And the weirdest thing - we connected a 4-pin loudspeaker to the board, and there's no beep even if the RAM is removed. The shop had no other LGA 1155 board or processor to continue the testing, so they sent mobo and processor to Asus on warranty claim... I've seen these symptoms in the past and I'm very worried: it looks EXACTLY as if the processor fried! Though it wasn't hot for a split second, that might be the case. Looks logical to me: defective 8-pin (processor power!) on the PSU gives out wrong voltage, fries the CPU, with proper PSU there's no video output or RAM missing beep (that's what it normally looks like).
I'm not afraid of a fried Core i7, all the stuff is still on warranty (just bought) and local IT shops usually manage the replacement well, but... What are your thoughts? Has anyone ever had the same issue? What causes it and what's fried in this case?
It sounds like the PSU was just a bad one from the get-go (hence no boot the first time), and something blew the second time and probably got the CPU or potentially something on the motherboard. Your scenario, while not exactly common, is still very plausible.