InvalidError :
Why three seconds? If your body is charged with any significant amount of electrostatic potential, it will instantaneously discharge as soon as the gap gets small enough for arc over. If the potential is too low to arc over, the amount of electrostatic energy should be well within semiconductors' human body and machine model discharge tolerances... and opening the case without touching it would be a difficult feat.
The biggest danger is charging back up after initial contact and forgetting to discharge again before touching something else.
In this case though, the OP said he used Arctic Silver and if he put so much of it that it overflowed onto the CPU substrate, it might have shorted out, nothing to do with ESD.
This is funny. InvalidError's right about this.
You really should take precautions and while static can harm components, I think Tom's did an article/experiment a few years back about purposely trying to ruin components with static and how extremely hard it is to ruin modern components with a static charge. But I digress...
As far as this OP's concerned, Smoke and electrical smells are bad by any means.
bowen179- Where did the smoke come from? The CPU socket?
If you use the right amount of AS5, you won't see smoke or smell anything. That is likely not the cause. If you use too much AS5 and get it on exposed metal on your board, your PC will short, but you won't see smoke or smell that electrical smell either.