The resistor by name and design is made to produce heat. Is the insulation on the connector? If so, that is just about a normal occurance for the resistor going bad. It will produce a lot of heat and cause coating to melt. I would change the resistor and not be overly concerned if all the fan speeds work properly. If there is a different sound to the blower then look at the current draw to the blower. You probably will be OK with just replacing the resistor block.

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