I'll have to agree with Clint on this. I've been running my POM outdrives on my diff have lasted me about 3-4 months of open modified racing. POM is a type of plastic that is very durable. So 3 runs and melting seems really unreasonable unless the diff was extremely loose. The diff will heat up to a point, but not to the melting point of plastic unless something is really wrong.
I would just rebuild the diff. get some fresh diff rings, sand them down till they are flat, get some ceramic differential balls and break it in properly. The Pro Diff that comes in the Cyclone TC is easily the best diff I've ever delt with, so it shouldn't be giving you any issues.
If you have any other questions, please feel free to ask. Some us may be a little quiet for the next week as we'll be at the ROAR Paved Electric Nationals. I'll try and pop on every night and check on the thread though.