Hmm. I haven't tried this specific scenario, but I did make a kind of physics based explosion by spawning multiple instances of a physics enabled object, and adding force via events to each one.
Possibly, you could use an explosion sprite that grows outward, and use collision events to add force, although this is just musing and I haven't tried anything remotely like it.
Another thing with physics objects is that they don't like overlapping at all. They tend to fly out violently when stuck on top of each other.
Always: physics object overlaps explosion sprite
Set physics object x to explosion sprite x
Set physics object y to explosion sprite y
If more than one overlaps, the physics engine will fling them outwards unpredictably. I don't know if this is any use - but perhaps it will inspire more ideas.