This is a most plausible explanation, the plastic liners of the bottles are made of an oil based material. I was there, but not at the fill station at the time and decided not to rush over in a morkish manner to gawk at the incident. I did see the bottle, and it looked like the reg had been blown clear out of the tank and the divot in the ground was about 4-5 inches deep. This and the compressor will be inspected from what I understand and any speculation to the actual cause before that won't help in the matter.People who are in the know about this sort of stuff have suggested that the inner plastic liner of the bottle could have something to do with this, Stakko are the only guys that use this and I personally have only known problems with these tanks but this may not be the case of course.
Though I will say once was unfortunate, two was questionable, three is seriously worrying. I am sure there was nothing unusual about Nige's set up and that the bottle would have been as supplied with the original reg on .
I hope Nige makes a speedy recovery and there are is no long term effect. The emergency services were all on the scene promptly and I'm sure he is receiving the best care possible. All the best to you mate and speak soon, oh and I gave the disc I ran off to Greg to pack in your car if you're wondering, though I would understand if you don't want to go through your kit for a little while.