2005 5.3 - Strange noise, then smoke and flame from spark plug

Interesting. I can't see a spark plug gasket failing to start a fire or even if the spark plug was loose, too many threads on the spark plug. Oil like you say and a bad spark plug wire I could see, spark jumping to ground by the plug wire boot with oil around it maybe...Dry noise could be a pulley for the serpentine belt, bad idler pulley, a dry bearing, then you have your fans on the radiator probably kicking in full blast. These are my ideas, please let us know what they find with this. Interesting...

I will update when I know for sure. I'm just trying to figure out how the noise and the smoke/fire are related. I also forgot to mention that the "traction control off" light, the emergency brake light, and the ABS light all flashed on at the same time as the noise started, which was right after starting the engine.

Make sure they check the wheel bearings. If they are bad, they could heat up and fry the wheel speed sensor causing those lights to flash.

The shop said the starter burned up which caused damage to the spark plug wires and the clutch position sensor wiring harness. The owner of the shop agreed that this is pretty coincidental with the flexplate replacement done just 3 days earlier (different shop). I'm pissed because these are such easy and cheap parts to replace compared to the $1400 they want to charge me, but I'm in a different state than the car so I can't really do anything. I hope they find something wrong with the flexplate so I can hold the other shop accountable.

Ask them what would cause the starter to burn up, I have never seen a starter cause a fire. Only if the positive cable running to the starter some how was touching or close to a ground it could ark over. The starter would have had to come out when replacing the flex plate. Still the starter is down quite a bit lower than spark plug wires, the fire would have had to climb up the side of the engine some how.

We'll see what they say, they said they'd do their best to diagnose it. My best theory is the spacing was off when they reinstalled it the first time with the flexplate, and it somehow jammed in the engaged position with the plate and turned the starter into a generator. After about a minute of it spinning it created enough heat in the motor or the wires to melt and ignite the insulation which then spread to the other wires.

That can't happen because of the starter drive. The starter drive that engages into the ring gear on the flex plate only locks in one direction to turn the engine over, and it free wheels in the opposite direction so the starter armature cannot spin backward.