Sir Lord Jeff

The issue is with the server so I can't force a crash but I can include the latest.log

As swekob says, most likely intended. If you look in the code for small fireballs it checks that the mob isn't fireproof before dealing damage. All nether mobs are fireproof and consequently can't be damaged by fireballs.

Tested it in 15w50a and I didn't crash, can anyone else confirm it's been fixed or did I get lucky?

Edit: Checked the source code, it has been fixed.
The previous code (renamed by me so I can understand it better)

Old Source

if (!this.world.isStatic) {
    if (movingObjectPosition.entity != null && !movingObjectPosition.entity.isFireproof()) {
        //Code to ignite an entity was here
    } else {
        //Code to place fire on the block the fireball hit
    }
}

The new code (again, renamed so I can understand it)

New Source

if (movingObjectPosition.entity != null) {
    boolean bl;
    if (!movingObjectPosition.entity.isFireproof() && (bl = movingObjectPosition.entity.damage(DamageSource.fireball((EntityFireballBase)this, (Entity)this.hit), 5.0f))) {
        //Code to ignite the entity
    }
} else {
    //Code to place fire on the block the fireball hit
}

As you can see in the new code for placing fire only runs if the fireball didn't hit any entity

I have noticed this also happens when you play a record if default music is playing

Same problem in 1.5.2, never been able to see world in multiplayer menu unless on the same pc.

Workaround is in direct connect to enter COMPUTERNAME:port or use ipconfig in cmd.exe to get your local ip and use that with the port

Confirmed to also occurs with block breaking particles, and other types too I'd imagine

Note I haven't tried this myself but SMP is now within SSP so logically all multiplayer bugs (maybe except those involving latency or other players) should be in single player so running as server shouldn't make a difference

Agreed, also if you check out my report I suggested a potential solution (code wise not work around)

Yes but that causes poor formatting with command outputs as it will always be white and not grey and italics, but changing it to be like that means that if you change the command to a say command the formatting will be wrong again. And this is inconsistent with coloured player names anyway, which reformat themselves to be correct.