We tinker in similar areas. The idea of cutting down a flare to a "fire starting size" is something I have worked on. The biggest issue for me was closing up the cut end in such a way that it was a good seal. Best I have found so far is a pvc end cap/plug. Just about the right size to fit into the flare casing, held in place with some good yellow glue. The ones I have used also have a multi sided end that would prevent rollling if placed on a flat surface. I also added a bit of para cord for holding in the event the burn was longer than expected. A small hole drilled in the end cap to pass the paracord through with a knot on the inside and then sealed with glue worked quite well.
The idea of mixing some smokeless poweder with the flare material and creating a paste sounds pretty good as well.
None of this seems to be an "explosive" combination from what I have read.