This study investigates the winding mechanical defects of power transformers including radial deformation and axial displacement of windings. The effects of these defects on performance of differential protection of the transformer will be investigated by modelling these mechanical defects using the detailed model in EMTP software. The inrush current phenomenon and internal electrical faults including turn-to-turn short circuit and terminal fault are investigated. Then, the differential and restraint currents, obtained using EMTP simulations, are analysed by MATLAB software. Using the statistical methods and extracting various indexes in MATLAB environment, these disturbances are discriminated and classified. Both the experimental and simulation results show that some winding mechanical defects affect the performance of the differential protection and the proposed statistical indexes are able to discriminate among mechanical faults, external faults, inrush currents and internal faults.