The most common cause of fire under the hood like this is not too much nitrous pressure, it is too little fuel pressure! The fact of the matter is, Nitrous Oxide is a non flamable compound! What it does is provide more O2 for the fuel to utilize in the combustion process!
What happens is that the fuel pressure on the gas side of the system" unless it is a dry shot " will lose fuel pressure and the motor leans down and pops! Backfires up throught the intake and catches fire to the flamable material on the top of the motor.........Or the motor itself! I have seen my dad take and melt pistons down and blow the damn intakes sky high when he would lose fuel pressure to the system! Looks like homey was about to hit his torque range in 2nd gear and when that baby started pulling and lost its fuel........well too much air and not enough fuel will make some nice fireworks!
Take your Nitrous bottle and hold a flame in front of it and turn it on! It will extinguish the fire! But if you mix it with the fine mist of gasoline or methanol................Watch out!