I think the gas in the crankcase idea seems right.

I have noticed that the fuel filter has bubbles coming through it occasionally after the engine has been run accompanied by a distinct kind of Phizzing drip noise on the inside the intake manifold but not always. I guess previous backfies did some damage to the carb? I have heard the powervalves can get blown out by backfires?

I can't think how the gas vapour ignited either?

There was a really big bang and lots of smoke. There was so much force the rocker cover holes were enlarged over the cap screws and the covers twisted off a good 2". even the Moroso Wire clamps holes were enlarged over the cap screws. The dip-stick also blew out.

Do you think anything else will have got damaged ? it has a paper oil filter element.