I worked supporting Kennedy Space Center. On launches, even though we knew which direction to watch and the launch times, it was still difficult to see something as big as an Atlas 5 from 10 miles away. Sometimes you will not see the launch at all if there is cloud cover. So to see something as small as a Stinger at the ranges claimed would be impossible. Any other missile would be smaller than an Atlas and also difficult to see.
Fuel tank explosions do happen but I doubt that was the case. If you look at the wreckage photos (or accident report notes) you will see that the nose section had no fire damage (it went first) the fire damage was to CTR wing area. The engines were damaged on the right side. The Eastwind pilots said 800 was climbing and on fire and they were at the same flight level a few miles away so they could not tell in the nose was attached or not. The Eastwind pilots said it looked like 8090 had the landing lights on (fire). He stated that when he turned on his landing lights is when the explosion happened. They were looking directly at 800 and saw no missile or missile tracks.
An aircraft coming directly at you looks like it is climbing anyway from the ground. If it was in flames it would look like a missile. Climbing aircraft in flames then a boom, looks like a missile.
I did read the entire report by the way.