You can indeed open up the Model I bricks and repair them. A frequent failure mode is a
fuse inside the case that blows out. My friend had one blow out, and he cracked it open,
drilled a hole for a fuse holder and replaced the fuse.
It's a pretty simple power supply to build a replacement for. There's a schematic
on the Yahoo! TRS-80 group files section for an Australian 240v version which could be
adapted to make a 110v version.
The service manual is out there (Tandy and SAMS) which should have schematic as well.