My half-baked theory (a bit like the MOV) is that once the diode started conducting all the time, the MOV pulled down the voltage across the primary of the transformer, dropping its output enough to stop the unit working, my friend noticed this, then smelled something burning, then turned the unit off.
I've attached an attempt at a schematic showing what I think are the relevant bits, including the component values. Also pics of the board in question. Toasted MOV is the charred black thing tucked up against the transformer, D1 is the diode.
I pulled out the MOSFET and did a basic test with the diode setting on my meter, and it seems to be behaving properly. The 1A fuse on the mains input also hadn't blown, so I'm feeling hopeful, but there's also the control bits, which are SMDs under the board. I will take the advice above and sort out a light bulb before I fire it up (hopefully not literally)...
Russell.