It is possible that there is a defect in the torch. If the piston isn't pushing in all the way, it would cause a constricted arc and cause radial melting if the tip wasn't fully retracting.

Push in on the electrode and see how far it give when it goes in. Also see how fast it returns. Watch for any binding or freezing up of the piston mechanism.

The torch ignites an arc when the electrode is "blown" back by the flow of air pressure. The electrode is spring loaded and acts as a "piston" to go from a grounded condition to an open position, creating a spark gap. The basic concept is the same in breaker points ignition on a vehicle, where the spark jumps across the air gap when the points open. However in this cause, the spark generated ignites the plasma stream (sort of star trek sounding, I know, but that is really basically what happens).


Just as points that don't have good gapping will burn, this seems to be a similar situation. Its possible also that a hose is kinked inside the machine and its preventing full air flow to the torch, causing a reduced gap.

Now, of course, Mike is the electronics expert, but having a lot of experience with that torch, I am only offering some things to check.