The mic-in jack sends a tiny bit of power--I forget how much, 1.5 V? 3 V?--to the mics. If you are using a battery box then the mics are getting more power (9V? 12V?) than that, and if you are going Line-in, that jack supplies no power.
Have you checked the battery box? Hard to think that it could fry mics, but it seems more likely than the PCM-M10. Still, I'd suspect loose wires first of all.