The arc itself probably isn’t harmful– the power supply seems to have survived –but it’s possible that there was an electrostatic discharge at the same time, or that the power supply let through a voltage spike. The crystal or the memory of the chip could have possibly been damaged, although (and if so) that’s not really something that we’ve seen before in this kind of context.
The best option might be to try swapping in a good chip, to see if that helps. If the MCU is not running at all, then it probably can’t be programmed through the FTDI cable.
