What's the current rating on the motor? The motor will pull more current at start-up, so if you don't have the maximum current rating, I'd assume it's going to take 2 or 3 times as much during start-up or reversal.
Without seeing your schematic I'm guessing, but it might be possible that one of your relays failed and got "stuck-on". That would likely cause a short when you switch to the other direction. Or there could be something wrong in your sketch that's turning-on the wrong relays and shorting-out the power supply. (i.e. Like maybe it's "trying" to run both directions at the same time...)
It you might need to turn-off ALL of the relays for 100mS or so when you change directions, do make sure the ones that are off are really off.
....do you think this circuit might work if i had a regulated PSU that was a steady .5amps as .5amps is the max current the relays can take....
The current isn't "regulated". A regulated power supply has regulated-constant voltage, and the current depends on the load resistance/impedance. The otput current rating on a power supply is the maximum or "worst case". You are more likely to find over-current protection in a regulated supply, but not all regulated supplies have it. ([u]Ohm's Law[/u] describes the relationship between current, voltage, and resistance.)
Sometimes the power-supply current is limited, or there is some short-circuit protection so that the power supply doesn't die if you ''pull" too much current. Sometimes there is an internal fuse that blows. Sometimes you can replace the fuse, but wall-wart supplies are usually molded/sealed so you can't change it. Next time, you can add an external fuse yourself. Ideally, you'd have some safety margin, like a 1/2 Amp fuse on a 1 Amp power supply, so you can be pretty sure the fuse blows before the power supply blows.
I tried powering the arduino and motor sperately and still nothing....
Does the motor run by itself? i.e. Just the motor hooked to 8V with no relays and no Arduino? Maybe the motor shorted-out and that's what fried the power supply.
Do you have a multimeter to check if the relays are stuck? Or if they are working at all?
It also wouldn't hurt to hook-up some LEDs. You could hook-up LEDs to the relay coils and to the relay contacts to "see" what the Arduino & relays are doing. And/or you could hook-up 2 LEDs in oppisite directions to simulate motor-direction. (With current-limiting resistors in series with all LEDs, of course.)
You can try hooking-up the motor & relays without the Arduino and connect the relay-coils to 5V manually.
P.S.
It's not unusual to burn-up parts when you are experimenting & prototyping. It happens to professional engineers from time-to-time too. Hopefully, you don't fry expensive parts (like Arduinos & power supplies) too often. 
As you get more experience, it should happen less, and you can learn tricks like low voltage/current testing with meters & LEDs 1st, etc. And, testing of the more-rugged high-power circuitry (relays & motors, etc.) separately 1st, etc.
P.P.S.
If you don't have a meter, Jameco has them for about $10. And, if you have an extra LED and ~1K resistor, make yourself a little voltage-tester probe. A 1k resisor will work with most "normal" DC voltages. Then, next time you order parts, order yourself an "extra" meter-probe and a clip so you can build a "real" voltage-probe. I built one with a red LED and a green LED, to test for positive & negative voltages.
Sometimes a simple LED probe can be handier than a meter, especially it the signal is switching or "blinking". But, you still need a meter to measure voltage, as well as for measuring/checking resistance & current.
