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If someone was a little liberal with starting fluid, and the engine backfires through the exhaust valve, it can ignite the excess fluid that has been oversprayed on the surrounding components. I know a thing or two, because I've seen a thing or two... lol. I'm not saying I "believe" that's what happened, but I will say it's a possibility I wouldn't rule out.
That grommet around the ribbons appears to be rotting through age or a combination of age and a chemical. The photo of the head with the coils shows a pretty dirty engine which may indicate less than ideal maintenance and a contributing factor to the deterioration.