That blue resistor looks like the 1 ohm resistor on pin 8, am I correct? If so, then the pin next to it with the red wires seems to be pin 7 (the heating pin). Did the wires start to burn/melt when bossing, or did you find it like that? If you found it like that, change the heating wires to 18 gauge 105*C. Those wires would obviously benefit from good insulation from heat, although that wouldn't explain the burnt insulation on pins 6 and 3. They could be burns from a shaky soldering iron in a cramped space. I'm guessing this is what you're referring to as a fire hazard.