IMac Alu 20" blowing smoke! What do I do?

Hi there, now as crazy as this might sound, tonight i thought my iMac would set on fire.
I was working on my Imac trying to rip some music on itunes and well all of a sudden the thing made a sort of a weird noise. Actually it was kind of a little explosion (!!!) and then some smoke started coming out from the back of the machine.
That came out of that small line in the upper part of the case (back of the machine).
That really scared me off! At first i thought it was some kind of a problem with the lamp that I keep on my desk, but the smell of plastic is still pretty bad and you can smell that only on the machine.
That's quite a clear signal that it was something related only to the iMac.
I have no idea of what the issue is ... i have istat and i tried to take a note of how are the conditions of the fans, cpu etc etc.
I'm going to report those here
FANS
Cpu Fans 1199 rpm
Hard drive 1200 rpm
Optical drive 998 rpm
(these seem to be not right, i mean maybe one of the fans stopped working? have no idea tho, just a thought.I have been using the mahcine for quite a while now, for about 50 mins just to run firefox and the temps are still the same)
CPU
CPU User 2%
System 0%
Idle 98%
Temps
Cpu A 33
Gpu 43
Gpu diode 43
gpu heatsink 41
ambient 19
memory control 35
airportcard 35
hdbay1 42
I tried to reboot and to run a few applications everything seems to be running fine. I started the isight and it works, I played some music and it works fine too.....so I really don't know
Hope you guys can give me some help here.
Cheers
Tony

They replaced my imac, I got a brean new machine, the bad thing is thatg now Im dealing with the HUMMMM noise. It's so frustrating. I just can't believe it I wanted to get an Imac because i loved the osx and how my macbook has been working for the last year....but this imac adventure was not good at all.
I'm still testing the imac and seeing if i can get over the HUMM noise, I wonder if even other guys have that kind of issue. It seems like there is some kind of problem with the fans that are running all the time, the measuremens on istat seem to be fine cpu fan 1198 hd 1199 optical drive 998m ....but still there's this annoying humm in the background....I'm tempted to ask for a refund an give this a try in a few months when maybe they will have fixed all the problems.

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