iMac won't start with LED #1 green

Hi,

I have an iMac and when power is connected LED #1 is green. I know from forums the power supply is working with #1 to green. Now I have the following problem, when pushing the power on button at the back side of the machine, the fans will go on for a very short time (I think not even half a second). This is also the fact for LED #2, this one goes to green and than turned off. When I push the power button again, the same situations will occur. Is this the power supply which is dead? When it stopped working, the computer smelled like burned electronics.

Thanks,

Kevin