You're welcome. But damn!! I didn't even think of the fuses when you said you were loading binaries into the Atmega. I have been bitten by the fuses myself and I even have a textfile I made that has the correct fuse setting in case I forget. But I have never seen bad fuse settings make the VCC regulator get hot. I still don't understand why that would happen. Crazy HV rail makes perfect sense but I can't figure out how that would affect the VCC rail.
I guess I'm so accustomed to "everybody" posting here using the pre-loaded Atmegas that Ian puts in the kit that I didn't even think about fuses. But actually not everybody uses them. At least that's going to be my excuse!
Anyway, I'm glad it's working now.
Look into it later when the dust is clearing off the crater.