yeah the inherent resistance of the transformer may have been enough to not register as a direct short to the power supply, and instead it just created a buttload of heat.
you should be able to do that variable power mod with a mosfet conversion.
the variable mod only affects the power going to the driver transistor, which you are not messing with.
i'll bet i can guess what happened to you with that mod!
you probably didn't isolate the metal tab on the transistor from the metal that you mounted it to.
That tab is another collector lead, and if you look at the diagram, the collector goes right to the voltage source that goes through the transformer.
if you didn't isolate that metal tab from the metal heatsink surrounding the driver and final (assuming thats where you mounted your TIP120), then you just provided a direct path for the current to go through the transformer, right to PC board ground through that heatsink.
you need to use a mica insulator along with heat sink compound on both sides of it.
then you need to use a plastic shoulder washer so that screw doesnt short the metal tab to the heatsink.
if this is what you did, just try again using a new TIP120, and proper mounting procedure.
remember that the jumper (JP36 for your 29LTD) needs to be removed, and the coil that the wire gets soldered to it (L15 for your 29LTD) does NOT get one end removed. just leave the coil in place and solder the wire to the trace on the solder side of the board.
good luck,
LC