Take a good look at the larger capacitors on the motherboard. Do you see any bulging on the tops? Another sign is leakage (brown ooze) from the capacitors. It may not be much, a magnifying glass will help.
For pictures, go to http://www.badcaps.net
Lots of info there also.
Whether it's caused by bad caps or not, the fact that you can get the board to work (sort of) with an old "dumb" power supply seems to confirm that there's a short somewhere.
I would try the processor in a "known good" mobo just to confirm that it is still okay. If the motherboard is bad there is no economical fix unless it _is_ the capacitors. If you're good with a soldering iron they can be replaced. The website I mentioned has lots of info on that.