My first computer nightmare was loosing the 5-6 hours of work coding an animated version of hangman on a ZX81 - when I bent over to connect the tape recorder to save the program, I wobbled the RAM pack on the back on it reset. That was also my first experience of computer rage as I punched the poor little thing...and to insult me further, it kept working without a hickup!
My first computer nightmare of the sleep influenced kind was induced by many hours playing the game Repton 3 on a BBC - dreams of screens of puzzling diamonds, rocks and soil filled one night and was also the first time I'd dreamed in pixels!
The only other dream state computer nightmare I've had was caused by modeling the house I was sharing at the time in Doom, and then playing it...there's something deeply disturbing about finding a flame throwing monster in your living room which tends to stay with you for a while...
BTW - to DesignCaddy: with all the symptoms you have pointing to a CPU fan issue I'd recommend just getting a replacement anyhow. The MTBF for the fan might be 3 years, but that doesn't mean any particular one won't fail sooner.
Oh, and like The DJ - I've had a PSU blow up on me, but that was in the workshop putting together a batch of machines for a customer. The supplier of the basic unit had run out of stock in the UK and shiped us some from Canada (I recall), and I didn't check the voltage selector on the back before starting to install. I left a room full of machines installing NT over lunch, and came back to find the place smoke filled and with 5 fried power supplies...luckly, the mains trip switch had saved us from a more serious fire!