It sounds like you have multiple, unrelated issues.
The servo motor is likely broken and should be replaced. Unplug it from your EBB, and please contact our customer service directly about that: http://shop.evilmadscientist.com/contact
It sounds as though your motor current is set _way_ too high. The motors should not get warm, but not hot, and they should be able to be turned by hand, with some resistance. The motor current setting should not affect the servo, except that if you turn up the current enough, it could plausibly draw enough current to overload the power supply.
