As reported to the FAA. Reports are unverified, and codes are left as the FAA publishes them.
What was found
WHILE IN FLIGHT THE PILOT SAW SOME SMOKE COMING OUT FROM UNDER THE DASH NEARBY THE TRANSPONDER. THE PILOT RETURN TO THE BASE WITHOUT ANY PROBLEM. AFTER INVESTIGATION THE TRANSPONDER WAS SMELLING LIKE SMOKE, LIKE SOMETHING THAT BURNED INSIDE. SERVICEABLE TRANSPONDER INSTALLED ACFT RETURN TO SERVICE.