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Just bought a new fan from Lowes the other day to be placed in the dining room. Previously, a chandelierr was in the dining room. It was operated by two switches, one on each side of the room. One switch had a dimmer that would dim the lights on the chandelier.
I turned off the breaker, removed the chandelier which had three wires. To me, they were a power, ground, and another wire that I'm unsure of what kind it was but looked like speaker wire and was very thin compared to the two others. In the ceiling was a black wire, white wire and a bare copper wire. I removed the chandelier and hooked up the fan as per the directions.
There were 3 wires from the fan; power (black), ground/neutral (white), and light (blue) wire. The white (neutral or ground) wire was connected to the white wire in the ceiling. The black wire to the black wire in the ceiling (power), and the blue (light) wire to the black wire in the ceiling as well. However, the bare copper wire that was used by the chandelier was not used this time. Turned the breaker back on, the fan and light worked fine. However, the dimmer switch didn't do anything. I turned off the breaker and exposed the wires again.
My reasoning for the dimmer not working was because the bare copper wire in the ceiling wasn't connected to the light wire on the fan. I spliced a wire into the blue wire and connected it to the bare copper wire. Now this wire was also connected to the power (black) wire. Turned the breaker back on. Flipped the wall switch and heard a "pop" coming from the switch with the dimmer. The fan and lights didn't work. Turned the breaker off.
Disconnected the fan thinking I blew the fan up. Reconnected the chandelier with the original wires, turned the break back on, and to no avail, it did not work. Turned off breakers and removed the chandelier.
Removed the wall plate with the dimmer switch and the inside of the box smelled burnt.
With a 3-way switch, there is a wire between the switches, so that only one controls the fixture. Your original wiring was close to correct, but when you connected the blue and bare wires, you set up the "short". That caused the power to burn out the dimmer switch.
The blue Light wire should probably have been connected with the black to power the light.
Some times (not per code) someone cheats and uses the bare wire as the connection between the switches. There should be a fourth wire (sometimes red) for that purpose.
Pick up one of the home repair guides and check out 3-way and 4-way wiring diagrams in the electrical section.