As far as the water subject, when my packs are ready to be retired I place them in a bucket of salt water and then puncture each cell one by one. The punctured cell will burn under water for a good period of time so water does not put it out but contains it. Human error is the biggest problem. I use the ammo box method with a few holes drilled in the top for ventilation. They are in my garage sitting on concrete away from any flammable material. It a box goes up the hope is it will be limited to the box and a few feet around it which is just concrete floor.
I would love to hear more about the fire safe failure story was it sitting against something flammable?? What size pack or packs were involved??