<With a little bit of imagination it could be pointed out that what he saw was a space ship that was in trouble and the occupants were franticly trying to save their ship and themselves from the imminent explosion of the propulsion core. They may have made the error of constructing their craft from pure titanium or some magnesium alloy that can ignite and burn in Earth's atmosphere.

First off, it would be impossible to disprove this without the chance to have observed the object beforehand. Also, I don't know if the impactor was observed over Finland. It could've been another object. The orientation of the "butterfly" blast pattern should determine if it is possible.

That being said, do you suppose your grandfather would be able to resolve a human (large-1 meter tall) at the altitude of at least 100 kilometers?
Any lower in altitude and the dynamic pressure of the entry (at least 10 km/s) would make such an EVA impossible.

Would your grandfather, educated before it was generally well known what this phenomea was be able to observe rationally with some understanding?

I do not know what ‘evidence’ has been dug up on the tunguska site to prove that the explosion was a meteorite or something else.

If I remember correctly, fragments of what is thought to be the object were removed from trees in the blast radius.