Doesn't black smoke signify burning oil? I assume you didn't try to oil it to make it "smoother".
J/K. That does suck though. Hopefully CC will help you out since it is so close to the warranty expiration date. Even if they don't, at least the cost for a replacement is reasonable. Hopefully there is no collateral damage (motor, receiver, servos).
I wonder if the constant jolt to the components from jumping caused this? Hmm, I think I'm gonna add some foam padding to the ESC bottom just in case...