PoE and USB power simultaneously fried Mega 2560

Development Tools IDE 1.x
1

Hello,

For a small project using a bunch of ultrasonic sensors and a webpage, I set up some Ethernet communication using the "Ethernet Shield with PoE" to transfer the data from the sensors to a graphical visualizer.
A couple of days ago, I had both USB and Ethernet connected simultaneously with no PoE and the shield LED's began blinking for communication and the Mega 2560 "ON" LED lit up and everything seemed to be working fine.
Today I connected the board to a proper PoE switch and wanted to flash some new software to the board and when I plugged in the USB cable to my computer while the PoE was active, my computer immediately shutdown and smoke began rising up from underneath the Ethernet shield. The shield seems to have survived as the LED's kept on running while I hurried to disconnect the USB and Ethernet cable providing power.
I have tested my computer's USB port and it is still working but when connecting to the Mega, only the "ON" LED lights up, the RX/TX LED's stay off and no new device appears in Device Manager.

My best guess is a fried Mega chip due to the location of the smoke.

Does anyone have an idea to why this have happened?

Seems a bit weird that the shield is incompatible with a simultaneous USB connection.

Thank you

2

Update:

From what I can see there a burn marks present on the Mega 3v3 regulator and ATmega16u2, which might explain the reason for the burnout as there were two 3v3 regulators in parallel and 5v DC from USB and 5v from PoE Vin 5v regulator.
Although I am still confused by the incompatibility and missing regulator switch-over between the shield and Mega.

If the ATmega16u2 is the fried chip that would also explain the missing communication LED's and device in Device Manager.

Have anyone experienced the same thing or perhaps have a working PoE setup?