Suicidal Victor 884's...

[Al Skierkiewicz]

The events you describe are unusual for speed controllers unless they are hooked up backwards or shorted. The devices you saw when you removed the fan are the FET (field effect transistors) that do the switching to the motor. There are four sets of three FET in parallel. When the motor is running two banks of FETs are turned on at a time.
It is possible you had a early failure (we call it "infant death" since it occurs very early in it's life) due to defective parts but I suspect shorted wiring, metal flakes in the controller or damaged motor. Since you were using the new drill motors and there are known problems with these when handled wrong, I would check the motor and make sure the brush assy is still in good shape.
"We took off the fan and saw that one of the SCR's or (whatever they are) had cracked IN HALF and shorted out the two next to it, causing the plastic to melt and smoke, etc..." This is a normal failure mode for these devices in that at high currents, there is a lot of internal heat generated. However, one dead device probably did not kill the other two, they all went together as a team. Inserting another engineering slogan here..."They gave their life to save a fuse!"