After many hours or analyzing, the problem ended up being the flywheel diode. It was way undersized and because of that, a large voltage spike went through the controller, blasting parts away as it went.
The second generation controller has many new features and fixes, such as a microprocessor, 16KHz freguency, IGBT driver, Hall Effect current sensor and a large freewheel diode. Eventually I will hook up an LCD display to it and add some more feaures. This controller is still early in it's development, with parts being ordered this week. I have lots of work to do on this software for it, creating IDLE control, Performance/Range settings and what ever else I can thing of. I have gone through this particular design a few times, and showed to some professionals and it should work perfectly fine. Ideally I would want to make this as customizable as possible, and maybe make a small side business in the EV controller market, but that is probably a few years off.