lifeis f

I live in Toronto, last night there was a major lightning storm. I left my gaming PC running overnight. At about 2am was woken by a regular beeping noise. The PC was no longer working. When the power button is pressed, the lights come on as normal, all fans spin up (power supply, cpu, chassis) but less than a second later the fans stop spinning, there is a beeping noise, and the whole thing repeats. The green led on the motherboard itself is on as normal, unplugging the hard drives power cable made no difference. There is no visible sign of damage, nor any smell.

Am I right to suspect the power supply here? Is that the first thing to try replacing?

System is 4 years old, core 2 quad cpu, on LGA775 motherboard with 8gb ram, 1 ssd, 2 hdd's, an optical drive. System has run flawlessly with no issues for many months until now.

Help?

I was planning on upgrading my main PC, which is used for gaming. Current specs are 2.7ghz intel quad core, 8gb DDR2 ram, Radeon 5870 1gb.

I was thinking of upgrading to an intel i5-2500K, 8gb DDR3 1133mhz, and a Z68 based motherboard.

Does this represent a significant upgrade, or am I not likely to notice the speed difference? It will cost $600ish to buy the components.