The smoke has cleared but the capacitor is still over 120 degrees !

Was the capacitor new?

I’ve heard of that happening, be careful as it might have pcbs.

Sorry, but PCB's won't bite. It takes exposure over a period of time to affect someone if it ever does. In my opinion since I worked on equipment that contained them for over 10 years.

the capacitor was the original (date 40th week of 1974) but it tested good when I installed the new ballast.

PCB's or not , I have asthma so I don't need to be breathing smoke anyway so I opened the windows, turned on the fan and "got out of dodge" till the cloud cleared !

That's good. Hydrogen gas will make you nauseous.

"Because of their chemical nature, electrolytic capacitors have lifetimes limited to about 10 to 20 years. After this, the chemical paste dries out, and the component loses its ability to hold a charge. If a device sits unused for many years, the capacitors can dry out. Later, when you turn the equipment on, the electric current produces heat and chemical reactions in the capacitor, making it bulge."

I wish I knew this a long time ago. A few years ago I purchased a used Westinghouse OV-25 on eBay. When I received it, I plugged it in and it ran for maybe a few minutes then I noticed there was liquid in the upper housing, (I had the fixture laying on the floor in the garage.) So my first thought after the disappointment of the capacitor swelling and leaking, was to take the fixture outside and clean it out. So I used the hose to spray it out while it was leaning against the wall by the garage in the driveway. I was standing in front of it so I was standing in the water that was running out of the fixture from the hose that contained the PCB oil. After telling another member what happened and being warned that the oil was a carcinogen I freaked out. Because I had just been standing with bare feet in the driveway with the water and oil running down the driveway under my feet. So I didn't want to even mess with it anymore. I pitched the whole fixture in the garbage can. I had been shaken up enough already lol.

The old Moloney Electric and some Westinghouse transformers contained PCB's. The Moloney's had a decal on the side of the tank that said "Moloney Electric With Inhibitol" PCB inhibited oil. They claimed it kept the oil from degrading and the insulation in the coil from breaking down and failing. Some of the substation transformers 5000 KVA and above that we serviced had PCB inhibited oil in them. We would remove the coil/core with an overhead crane, clean the tank, centrifuge press the oil to remove impurities, and re-tank and re-oil if the filtered oil passed the di-electric tests for flashover. We had oil all over us and our clothes and this was in the 70's.  
Knowing what we know today I certainly would not do it again but that was over 45 years ago.

Best thing to do is read up on it online. It's like everything else, some might fail while others might not with all kind of variables like heat, previous service, etc. IMO

I've spent 35 yrs doing paint and body work . Almost all the paint materials we use contain Isocyanates. It says right on the can that "long term exposure to isocyanates can cause respiratory issues" Guess where my asthma came from !

When we rebuilt those substation transformers, we would load them on a flat car and move them into Central Shops and unload them into the "pit". That was a concrete depressed area and we ran actual primary voltage to test the strength of the coil/core insulation by overexciting the coil to 110% of it's rated voltage for 30 minutes. This was to see if the insulation broke down and basically test it's future viability. To me, that was the fun times of my electrical work and I learned a lot.

I've learned a ton doing paint and body over the last 3.5 decades and I constantly argue with newbies over stupid things they want to try that  I've already tried and know WON'T WORK, then laugh at them when it all goes wrong !

Know the feeling.

Just watch, years from now Spray 9 cleaner will be lumped into the "hazardous" category along with pcb's. I knew a elderly retired electrician, he said there was no better cleaner than pcb's. I guess you thermal cycle anything a few million times and anything may change composition.

PVC's were designed to prolong the life of electrical equipment like transformers and capacitors along with much more.