John: I'm not a lineman, but previous experience has shown that to be a result of loss of one phase of a three-phase transformer feeding apartment 120/208Y(where I used to live) or commercial (many cinemas I work for) buildings. If your city block is based on a network distribution system I would imagine the same scenario could happen....
Most utilities will connect their grid transformer secondaries in parallel. All the transformers then share the loads. This only works in the cities where transformers can be connected in grids. That way, if one load increases past the capacity of the local transformer, then the other transformers can help fill the gap. This allows the utilities to continue to use the older, smaller kva transformers that were plenty large enough in the 50s, but are too small for todays electrical hungry homes and businesses. It worked so well, that the utilities continue to save money by specifying new smaller kva transformers. The problem is: if one transformer opens, then you get a higher voltage drop to the loads due to increased load on the remaining transformers and longer distance to some loads. VD = 1.73 x I x L x k for 3 phase and VD = 2 x I x L x k for single phase. The further away from the other transformers, the worse your brownout. The higher the current draw, the worse your brownout. It just escalates. Sometimes, entire substation grids are lost when one transformer opens up. You were lucky, you only had a brownout.
Dean, I agree with everything you said except the first couple of words "Most utilities". Some electric utilities have done that and because of the scenario you have described, most have dropped the practice. We actually experimented with that a little and dropped it when customers burned up motors. There are some electric utilities that have a fuse device to tie the secondaries together. This permits the adjacent transformers to help with voltage drop or sag but will open on overload (cable limiters will not open on minor overloads, only on fault levels of current).
Moving to large underground networks, most electric utilities have indeed connected their secondaries together. We use network protectors on the primary side of the transformers to protect the primary circuits from back feed. We use cable limiters on the cable from vault to vault to protect the entire secondary network from going down. We require cable limiters to be used on service laterals (both ends) to protect the services from the vault. This will permit us to actually replace a transformer and still keep a building in service during the process.
Bob, you know the dumb question is the one that is not asked.
You can't do a system like this and have the transformers right next to each other at different sizes. Consider poles with transformers that are feeding a span in each direction throughout your system. There would be three spans between each transformer (one span would have no customers off of it as it would be connecting the to buses together. Since each transformer would be feeding several homes, there would not be that much current flow between the buses. However there would be some and that would soften the sags and take care of some of the voltage drop. The problem though is not the size of the transformers as much as a difference in impedance but the distance apart takes care of that with the impedance of the bus.
Downtown, we will use about the same size and impedance transformers everywhere and with the secondary lengths, that is not a problem.
With all that, consider that I am telling you what I have picked up over 35 years with IPL. I have never worked the downtown network nor do we use any connections between our overhead secondaries.
I worked ten years as an electrical substation maintainer, ten years ago, so my knowledge is not as extensive as Charlie's. But, it was at a small city owned utility in New England. I guess I generalized my experience with what is done nation-wide. It is good to know that many places will spend the bucks to engineer their distribution system right.
This sounds like a backfeed situation, We have this happen when We loose less than all three of the line fuses on a distribuition circuit. Bigjohn was probably on the phase with the blown fuse, but saw partial power/"brown out" conditions because a three phase bank of overhead transformers, was causing the backfeed.