The retard
icon threw me off so I got on the defensive.
Looking at your mods it doesn't looks like you messed with the wiring in there so that makes it tough to isolate a possible short. The concern is that you smelled burnt electrical so something is shorting/burning...we got that. Now to find the problem.
I don't have the wiring diagram in front of me but a horn can't be that complicated. Wringing it out may be a bitch so a visual might be a better start. I would get in there and inch by inch as much as you can trace the wires and see it the shielding is cut or kinked or just fubared. OHM it out once that is done to see if it's getting a signal when it should and isn't when it shouldn't.
A buddy would definitely help if for anything to have a second pair of eyes since I imagine your aggravated at this point. Also, try and recreate the environment. Wash it like you normally do and pop the hood. It should be dry as a bine in there and if water is getting in there that may shed some light.
I don't want to write a novel but do the best you can to figure out why it shorted just from washing it. In the end, courtesy, ebay, amazon might have cheap horns to get in there to figure out what is going on and then you can install the train horn