TSX CTY2A Counting Module

Hi all, I am having an issue with a Telemecanique counting module TSX CTY2A. This is a dual channel module. One of the encoders on the machine that was connected to channel 1 was damaged (cable broken). When I arrived at the machine, there was a solid red IO light on the TSX CTY2A module and also a red IO light on the TSX P57203 base PLC unit. On closer inspection the TSX CTY2A module has suffered some sort of surge or short as the board inside was burned and damaged. We installed a new encoder and a spare TSX CTY2A module. Once we powered up again, the red IO lights were still on both modules and I could immediately see some smoke coming from the newly installed module. The power was immediately switched off. The encoder cable has been belled out and checks out ok. I can only assume that there is an incorrect voltage somehow getting onto the counting side of the module. Any suggestions most welcome.
It sounds to me like there's a fault in the field wiring going back to the I/O card, that fault being 'high voltage' on the wrong wire that easily destorys the I/O module.

a. Inspect the repair of the damaged cable for isolation of each conductor from the other and continuity of the color coding.
b. It might pay to inspect the cable from one end to the other for damage that has not yet been noticed that has faulted the cable. Inspect the encoder - has it been damaged?
c. Check for AC or DC voltage on each of the wires in the field cable to ground and to each other and for proper signal/power on each conductor.

If the module is a modular unit on a backplane, there is some very low probability of a backplane problem, but given that this whole thing started with cable damage, I'd be looking at the field side, not the backplane (I've only even seen 2 confirmed backplane failures out of hundreds, even thousands of rack units).