I think I figured this one out...
In my particular case, the problem was fixed when I did the following things:
1)The damage on mine was set to 10,000 with 0 for Radius Override... Radius Override at 0 is based off of magnitude...and apparently with 10k damage...that's a lot for the engine to handle. I moved the damage down to 150.
2)I moved the env_explosion out above the gas tank... don't know if this matters...but it was one of the changes made
3)The Radius Override was set to 0... I changed this to 100... clamping this seems to make sense, logically it prevents the engine from having to calculate damage/collisions all over the map.
So... keep damage manageable, possibly place your explosion just out of the model, and clamp the radius... see if that helps.
