What does ATI Tech say ? To send it back to them under warranty ?
When did your computer display the message to connect the power supply to your gfx card - in Windows or on the boot-up DOS screen ?
If you could still boot to Windows, the card is still working but has detected that it's receiving power only from the AGP slot and not from the extra power supply connector.
The charred wire indicates that it had been operating for some time with a loose contact that caused sparking and heating. The loose contact could have been at the male-female contact, at the wire crimp or at the solder point on the card.
If you want to send it back to the company, that's one solution. Otherwise, do the following or engage the help of an experienced electronics tech. Observe standard precautions against static electricity.
Clean the male side of the connector (I assume it's on the card) and check the soldering. It will be practically impossible to clean the female side of the connector. Replace it or use another one if your PSU still has an unused connector.
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