How bad is this?

Sorry to hear. The local would have to be highly recommended and awfully good and a whole lot cheaper to be worth not sending it back to the maker. Emmanuel could probably fix in his sleep and with upgrades what anyone else would have to try and figure out.

First Sound is in the Brooklyn borough of NYC; given the impact of COVID there you should probably call to see if they are presently open for business

A spider crawled into the pot, got fried, thump, then debris in the pot, noisy.

Anything's possible, I would definitely do two things before I packed it up and sent it in:

1. remove covers, look carefully everywhere, any discoloration, trace of anything??? you can take photos of anything suspect to email to someone. you can take photos to show no problems/rule things out also. might help narrow down the problem.

2. contact cleaner/lubricant on all the volume controls/balance ...., all pots inside. Spray, rotate, spray, rotate, swish em full spin frequently.

Appreciate the responses.  Will see what I can figure out and follow up with First Sound for potential repair/upgrade options.  Thanks and stay safe.

Any repairs I have undertaken, my first stop is taking the cover off to see the damage-I had a mouse fried in my quad monoblocks -didn't cause any damage luckily but sure smelt bad until we found the source. Next is to get a few pics and see your local repair guy. If he's any good he will refer you to the manufacturer if it's beyond him.Send pics and description in an email to the manufacturer for best next step./Good luck

First get a small vacuum they use on computers , the if that works stabilant 22
put on the pot ,I have had a similar problem with dust and this is a super conductor protectant and fixed many a oxidized component well worth trying and the stabilant 22 Is great for all low powered items like rca,speaker terminals used by hundreds of high tech 
companies for years and makes everything sound a bit better once cleaned including vacuum tube pins and protects if not moved for a minimum of 12 years
if this works I would put some electrical tape around the exposed area to seal 
it if possible.  If you have to replace it buy a better one like a Khozmo attenuator
they use a resistor ladder and only 2 resistors on the output and is sealed
about $400 with  nice remote if you have to do a repair make it better with a few mods. 

I have a recurring problem with my system:  The right channel plays hardly at all now.  I switched the cables between the pre-amp and amp, and the problem remains on the right speaker.  That would seem to indicate there is a problem with the connection to that right speaker, rather than with the right channel in the pre-amp or amp . . right?  But I checked the right speaker cable and the connections are secure.  And these are passive speakers, so there isn’t a amp in the speaker to go bad.  I’m stumped.

P.S.  Problem exists whether I play the tuner, sound from TV or the turntable.  

I got my problem fixed, again.  There must be a problem with the right speaker connect on my Parasound A21.  I checked and switched various speaker connections and finally got both speakers playing fine now.  I have checked connections before and the problem remained.  Don’t know quite what I need to do to permanently correct this, but I am glad the problem is not in the amp or pre-amp.

Try Benny at Modular Electronics in Roswell Ga.https://aminaaudio.com/

+1 for Benny Amina in Roswell.

Sent unit back to manufacturer and turns out it was a faulty capacitor.  Will get some potential upgrades to go along with repair.  Appreciate the responses and very happy I sent back to manufacturer for peace of mind and to make sure everything will be good as new when completed.