I have now pulled the PSU and these are my readings (no load):
P8
Yellow 11.9v
Green 11.54v
Purple 5.34v
P9
Red x3 5.36v
Blue 4.95v
P10
Green 11.54v
Red 5.34v
P11
Green 11.54v
Red 5.34v
Is this a healthy PSU? Is the 12v line a bit low?
If this is OK am I looking at pulling my 256K motherboard now?
So, you've found that with the PSU disconnected from the motherboard, the +/- 12v , the +/- 5v, and the POWER GOOD line is as they should be. That highly suggests that the PSU is good. Don't worry about the 12v being slightly under. Maybe the odour you smelt in the PSU was due to the odour being sucked through the PSU.
Maybe the motherboard is shorting out one of the voltages (-12v, +12v, -5v, +5v) from the PSU. The scenario of a shorted tantalum capacitor on the motherboard, as described by James1095, is quite common. See
http://members.dodo.com.au/~slappanel555/failure.htm
Note that just because the fan in the PSU is turning doesn't mean that the PSU must be working. The fan, for example, may be connected to the +12v within the PSU, and it is one of the other voltages that is shorted. To see if the motherboard is shorting out one of the PSU voltages, connect the motherboard to the PSU and do the same voltage measurements that you did earlier, excepting that you only need to measure on P8 and P9 (the connectors for the motherboard).
If there is a short, you'll see the POWER GOOD line, the purple wire on P8, stay near zero volts (or low, e.g. 1 volt), indicating that the 'power out of the PSU is not good'. And with that, you'll find that one of the voltages (-12v, +12v, -5v, +5v) is near zero volts.
Let us know what you measure.