I wonder how this exploding flywheel thing got started.
I spent quite awhile researching this and found bobs4cycle forums has several fairly credible sounding reports of stock Briggs 5hp. flywheels exploding, but only when this particular model had been highly modded to spin up into the 10,000 rpm range. As I remember, the only credible sounding death report I ran across was to a spectator that happened to be standing right next to the track when a stock Briggs 5hp flywheel blew at these rpm's.
Several people brought up a good point that most any flywheel could be damaged from improper removal/installation or dropping them. I'm thinking the very few flywheels that have been reported to blow up at very-very high rpm's may have already been damaged/defective in some way.
All I know is what Ive read on the net, and I definitely don't believe all of that. But If you ever want to seriously debate this issue, you'll find some very worthy opponents over there on bobs forum.
I think this whole myth has been greatly overblown by the guys that make money selling racing flywheels, but I do think they're probably a good Idea in at least some full race engine situations.