Dead iMac G3 Summer 2001!!

Indragle,
Just happens to be your luck. The average PC lasts only 2 years, and the average Mac as long as 8 and sometimes longer. Now that CRT iMac is a little harder to repair, though that's only because it is all in one unit. PowerMac G3, G4, and G5 towers are more like your average PC in their accessibility to parts. If you want to read more about it, see this website:
http://www.macvspc.info

Let's not try to make comparisons of PCs to Macs, and try to resolve the issue at hand. At least the CRT iMac when disassembled can have its hard drive removed and put into an external hard disk case and attached to a newer Mac and usually it is able to have the data accessed again if all it was, was a power failure or power supply failure. Those can happen just as easily to any Mac or PC. Just luck of the draw and where the currents were flowing. The battery can easily be obtained from any Radio Shack and it simply controls the clock and the primary system settings. CRT machines all can have issues with dimness resulting from a failing flyback transformer. Let's start by having the battery replaced though and see if that fixes the issue. If not, then try zapping the PRAM at startup.

http://docs.info.apple.com/article.html?artnum=2238

And if not, see if the machine starts up with an external VGA display. Behind the back panel of your Mac on the bottom is a detachable flap where you can connect an external display. If you can get external video that way, then you know the problem is simply with the display.

A new Mac costs only $600. And an external hard disk case no more than $80 that you can attach it to. And if $600 is too much for you to spend, there are many resources for working used and refurbished Macs I've listed on my page:

http://www.macmaps.com/usedrefurbished.html

Unlikely, sounds more like the flyback transformer, and here's why:

http://en.wikipedia.org/wiki/Flyback_transformer

If the flyback transformer goes, it is gone. Nothing you can do to fix it except take it to a service technician who knows how to repair it. That may cost more than the machine is worth.

However, at least as an external display, you'll have access to the contents of the machine until you can migrate data over.

Yes, stop using the computer now. That smell and spark is a worse sign altogether, it is a fire hazard. You may still be able to salvage the hard drive, if a technician takes it out and puts in a Firewire hard drive case to attach to another Mac.

Something definitely is causing electrical shorts inside the computer. That's not a computer I'd plug in.

Electrical shorts can be a side effect as you read from Wikipedia of the flyback transformer issue. In addition, they can be caused by surges from electrical outlets, thunderstorms through phone or electrical lines, or user induced electrical shorts from either touching the computer after gaining enough electrical charge (I did this walking across a wet rug at an office), or installing hardware without being properly grounded. I always make sure before I touch a computer now, to touch a desk that is grounded first before the computer.