I hang a piece of filter media on the INTAKE end of the torpedo which catches quite a lot of crap being sucked into the heater,which may cause some of the "smell" as well.I've been running mine on regular diesel and I've had no sooting issues so far.However,when there are residual fumes left from gun cleaning or such or in BK's case,clear solvents,it will smell from burning them.Yes,the heaters adjustment IS critical on how well it burns as well as the front deflector plate,which helps burn the fuell.Mine smells a "little" initally,but once that plate starts to glow,it's as good as it gets.I've not seen a nat gas one but they may have such.Propane units do fine BUT,unless it has a low pressure cut off,when the tank gets low,it will soot up the place like crazy.
One "tip" with the diesel units is to run some diesel Stabil in it before putting it away.The old diesel will slightly gel as diesel does and this is what fouls up the pump,screen and nozzle.
As far as causing an explosion or flash fire,THAT will depend on the concentration of fumes in the area.There is a rating level for the product involved on the MSDS sheet IIR.Now,"how" you measure that is a good question,I just error on the side of caution because I figure this will be a self-correcting problem.LOL...
BE SAFE!!!.