I accidentally fried my Arduino. I found this Instructable. The symptoms are the same. The board not powering on connecting USB source and the over current protector was heating up. So I removed the voltage regulator as mentioned in the Instructable. But the problem is the pins 1 and 2 of where the regulator used to be are still shorted out. That is even after removing the regulator, the pins seem to be somehow internally shorted. I tried checking the continuity on another working Arduino and found it to be not shorted. What seems to be the problem?
I know it's an old thread, but others are likely to have this problem. If you check the open source schematics, there are a couple of nearby capacitors that connect pin 1 (GND) to pin 2 (+5V) of the regulator.
I would check C2 and PC2 (top right of the diagram) as well as C1 (top left of schematic diagram), and any other components you can find that bridge the rails between +5V and ground. Capacitors are more likely to fail shorted than many other components. You will have to remove at least one pin of each capacitor to test it since you don't know where the short is, or you can simply remove capacitors until the short goes away.