How to fix my preamp dilemma

Its quite probable the transformer is fine, and has not failed. Parasound gear from that era used caps that seem to fail a tad early. maybe all it needs it new power supply filter caps. 

@talon I had a C352, I sold it with the tuner ‘as is’ on eBay to someone who probably had the ability to fix it

Sturdy, on a slightly different track here, what NAD i/a did you have, and what did you do with it? 

To repeat, I recommend the DAC as an upgrade to your current system. The Schiit Modi 3 retails for $100 plus shipping. It has coax, opticak and USB inputs. There is a optical input only version on Ebay with a current bid of $40 if that is the only input you need. 

I recommend the passive preamp route as a way to control volume between the DAC and amplifier as a way to avoid the cost of an active preamplifier. Schiit SYS passive pre allows for 2 inputs selectable by front button. Sells for $50 plus shipping. 
Another one, the Nobsound Passive pre sold by a US distributor, Doukmall, on Ebay, has single input and sells for $40 with shipping.  It is just a volume control in a aluminum box. I own both. If only needing single input I would purchase the Nobsound. 

You may find the use of a passive preamp to be all you need. Either way will serve until you are positioned to purchase a new active one.

Too bad you dont live in NYC, i have a Adcom GTP-500ii with remote I would sell for under $200 but i hate shipping stuff.

Yes, often the analog output is a 3.5mm headphone output 

you would improve the sonic qualities for both music and video with a outboard DAC. Most DAC outputs would allow for use of a passive preamp. Look up the Schiit Modi DACs. I believe it would be a great place to start. Would serve well with the parasound pre/ amp.

in the interim, a passive pre will work. 

There is a Schiit Audio Modi optical input DAC for sale on Ebay. Current bid is $40 and 10$ shipping. Would make for a true improvement over the TV optical output if that is what it has. 

Given you are on a tight budget, I am working to solve your problem on a strict budget so you get your music (also video?) back until you have the funds to upgrade. My approach would be to buy a budget DAC and a passive preamp. 

I was thinking that you could run digital out of your TV into the DAC then thru a passive preamp into the amplifier. 

Hence the questions. 

For the kind of system mentioned above, the Parasound is a waste. I voted for repairing the Parasound, but in my opinion you could use anything...

Ok. You are running apple tv into tv via HDMI then from tv to preamp via a pair of analog RCAs. You are using the DAC within the tv. Correct?

Your tv should have digital output. Likely optical. Yes? 
Another question, how many inputs were you using on the preamp?

@mesch there is an RCA type cable from the TV

How did you connect the apple tv to the preamp? Or did you go thru the tv?

@mesch, I usually run Spotify through the Apple TV which is connected to television. I don’t own a dac, but I think the Zpre2 had one? I guess I’m coming from an integrated amp/cd universe and I still have a learning curve with digital sources

Spotify downloads, via what device? A DAC. I am asking because you might get by using a passive preamp.

Bad capacitor (s),  if you open it you may see one that may be bulging or leaking. This would be the obvious sign. I think it might worth repairing. Just my opinion if you like the pre. 

1. Fix the Parasound...least cost probably and gets you back to where you were happy.
2. Schiit does indeed make fantastic gear for paltry dollars.
3.  Akitika is also a terrific value, but has way more features than you likely need and if you deck it out with headphone amp and phono, it adds up.
4. Used Adcom...nope.  they are getting on in years, and are easily bettered by the above.

Hello Sturdy  Are you a handy guy? Build the Akitika preamp kit and enjoy a very fine sound indeed. I've got a used Marantz 7T. It's available.

If you aren't sure what to do with PARASOUND, who I feel is an excellent company and would do everything possible to help, first I would contact them and find out if they can determine the issue and give you an estimate. They may have an authorized repair dealer or facility in your area. If it seems too much then stop there.
Look into the SCHIIT preamps. A lot of sound quality and tech for the money

Loud humming transformer might be a sign of fried rectifier diode - inexpensive repair.  I wouldn't turn it on to avoid further damage.

+1 to repair the Parasound, if it's not way out of line. I REALLY doubt it's the power transformer. Most likely some bad capacitors, relatively cheap.

Yeah, explain to them what it is doing.
Nothing to lose, zero cost.

A used Adcom preamp would be a good choice but they usually cost more than $200. Contact Parasound and try to get a price for the repair.

I considered a new Zpre3, the warranty and lengthy parts guarantee looks comforting after the last one without it, but $450 is a little out of the budget, and I think they are on backorder

Mostly spotify downloads

What are you using for a source? 

Why not buy a new Zpre3? In the long run you would be better off with something new!
https://www.crutchfield.com/S-gkJ8ITkoI0t/p_313ZPRE3/Parasound-Zpre3.html?awcr=77034681707577&aw...=

Do you have a guess at what that might cost? Not entirely sure what's wrong, but I can imagine it would involve a new power transformer. If it's gong to be over $200, I start to lean towards waiting for a used Zpre3, as I think it has sub outs, which the Zpre2 doesn't

Parasound has a good repair facility, why not try a repair?