hi there,
are you using a PC mic or a proper mic for vocals/instruments? if the latter, then plug your mic into an amplifier and give it the ol' "check check" test.
how much recording do you do, do you do any mixing/mastering? if so i recommend a small to medium mixing console and this sound card.
M-AUDIO - Delta 1010LT - 10-In/10-Out PCI Virtual Studio
though i don't recommend buying it directly from m-audio, you could find it for less elsewhere. i have one of these and it's a beast though be warned, no headphone styled inputs or outputs, all RCA and XLR (and MIDI, SPDIF).
Another question also, do you have one of those mics that has a battery with a built in preamp? I've had one of those and it used to shock our lips when we used it in preamp mode...ditch it and grab yourself, at the very least, an SM57 for vocals and instruments and if you feel like treating yourself a bit an SM58, although you can also get yourself a really nice condenser mic also but we're starting to talk serious cash there.
If recording is your thing you are going to really want to get away from onboard and standard fare sound interfaces, just because it says 24-bit doesn't mean it can record worth a lick.
I'm willing to bet that it's your sound card's mic/line-in (depending on which one you were using) that's blown...flying sparks don't indicate a good thing.
If you were just using a cheap PC mic then just grab another one and plug it in and try it, it's the cheapest test you can try.