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They claim some gas vapors were hidden in the rust and it exploded. He also mentioned he had not checked to see if the vent was working properly. This tank has been stripped and soaked more than once with non-flammable products and I just don't see any way on God's green earth what he is telling me is the truth.
Did the dude's nose get longer as he was telling his story mate? Ha ha, it should have. That damage is not as a result of the combustion of a tiny amount of gas fumes hiding in the rust, (which wouldn't have been present anyway) but rather, when he pumped the compressed air in to test if it was sealed. How do I know? I've done it myself, trying to use compressed air to pump the dent out of a CB750 tank. (which doesn't work, by the way) I caught mine in time and was able to pull the compressed air and pull the two sides of the tank back into the middle, but I reckon yours is too far gone?
A radiator is a pressure vessel, and as such, is designed not to deform under pressure, whereas a gas tank is designed to hold fuel and is vented in case of any pressure buildup inside. My guess (and I'm certain of this) is that the "Technician" hooked up the compressed air and walked away for a moment, while your gas tank was turning itself into a balloon.
Anyway, you got some money back and you have another tank, so no biggie. Do you have a bore scope camera? I bought one years ago and it's really handy for looking at the insides of gas tanks. If you do, poke it inside your replacement tank, and if it doesn't look like the dark side of the moon, give it a wash out with that Evapo Rust stuff (looks like a good product, I might have to buy some) and call it good. If it's cratered, don't weld it, get some of that stuff that Pete's talking about. Cheers, Terry.