Hello,
In my experience, I've seen this situation caused by the installer using wire nuts that were too small, or not properly secured with electrical tape. One of the wires may have fallen out of the wire nut and shorted to chassis, which caused the popping and arching.

Luckily, it's a fix that does not require any new parts, aside from a few yellow wire nuts and electrical tape.

Below are the steps needed to resolve the issue:

1) Unplug the unit.

2) Access the wires.

3) With a pair of wire strippers, cut off the burnt sections of wire.

4) Again with a pair of strippers, strip back about 1/2" to 3/4" of insulation from the wires.

5) Assuming that the incoming black wire is the hot leg, hold the black wire from the home and the black wire from the unit together and, using a yellow wire nut, twist the two wires together. Repeat with the white and green wires.

6) Though not everybody does this, I like to wrap the wire nuts with electrical tape to further secure them to the wires.

If you, your spouse, your friend, etc are not comfortable doing this, any repairman should be able to do this for you.

Good Luck,
KC