Problem with LEDs (Malfunctioning or Fuse)

Hi,
I have a question regarding the sub section of a power supply.
Background: I have two similar power supplies one is functioning whereas the other one is not functioning. The functioning one can output variable dc voltage from +(0 - 20)V. The nonfunctioning power supply can only deliver -4V at the output.
The sub circuit about which I have a question is at the output. Both supplies have similar sub circuit. This sub circuit consists of a transistor the base/gate of that transistor is connected in series with a red LED, this red LED is connected to a 1.5k SMD resistor and other end of this 1.5k is connected to a source point of +27V.
Both LEDs were tested in their corresponding sub circuits when the power was off and they appeared to be ok (Vf = +1.7V). Now the problem is that when the power is on the base/gate of the malfunctioning transistor gets only +0.1V whereas the base/gate of the functioning transistor gets +25V. Also the red LED of the malfunctioning power supply is on whereas that of the functioning remains off.
The voltage measured (with respect to ground) on the path/trace which joins LED and 1.5k SMD resistor is as follows.
Functioning Supply: +27v
Malfunctioning Supply: +2.2V
On measuring the voltage drop across these red LEDs following results are obtained.
Functioning Supply: -4V (red lead @ anode & black @ cathode) & +2.3V (black lead @ anode & red lead @ cathode)
Malfunctioning Supply: +2.1V (red lead @ anode & black @ cathode) & -2.1V (black lead @ anode & red lead @ cathode)​​
My question is whether or not LEDs are also used as some kind of fuses? If not, then what is your opinion about this situation?

If you post the schematic then we can see what transistors it uses (NPN or PNP) and how they are connected. Then we will know what is wrong with it.