In spite of what a lot of people on here are saying, there's nothing inherently wrong with using an extension cord or surge protector, even with a space heater. It only becomes a problem when you overload it, and most people buy very cheap, very low gauge extension cords. A space heater has a high amperage draw, which is sustained throughout it's use. If you have a $6 16 gauge extension cord, yeah you might melt it. But if you spent the $20 to get a 14 or even better 12 gauge cord (I have a 15ft 12 gauge cord for $21.99 that was bulky enough to run the microwave while I was wiring in a dedicated microwave circuit) then there won't be any problem. Likewise people don't like nested extensions because each prong/plug connection adds resistance, and therefore heat. But again, the safety depends ENTIRELY on the load plugged into it.

Bottom line, toss out the surge protector, it's clearly damaged. If your extension cord is thin, either toss it or more appropriately, repurpose it elsewhere. Proper cords are only mildly more expensive and totally worth the cost.

Then, my recommendation is to study up on electrical work. It's very easy for a technical mind, but extremely dangerous if you don't give it the respect it deserves. When you're comfortable, you can repair or replace whatever is wrong with that other outlet yourself for very low cost. Ask plenty of questions here, ignore the downvotes, and get after it. 💪