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Brian:
Yes the further way from the contact you would expect lower voltage because the cabling looks like a low pass filter. However, there may be some resonance effects that might actually increase the voltage.
It is difficult to guess at a point of entry without knowing what is failing, and what existing protection is in the "sensitive equipment.
Tfret:
Can you provide photos of the spikes you see on the 120 V side. The peak of a 120 V sine wave is about 170 V. So the worst case with an added 200 V spike is 370 V. But you said it might be higher.
If you get a computer transient limiting power strip and connect one of your instruments to this, then what peak transient do you see on the output of the strip going into one of your instruments. A short impulse into a low pass filter produces a lower amplitude output pulse, but stretched in length. In other words your input pulse contains a certain amount of energy, and if we assume the filter is relatively low loss, then the output contains about the same energy as the input and therefore a lower output voltage means a longer duration.
If you go inside your instrument and look at the +5 and other DC voltages how large is the transient at this point? With and without a transient filter preceeding the instrument?
Do you have instrumentation errors from the 1 turn loop that inherently exists at the probe input if not elsewhere?
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