Well, if it is sparking and "fusing", something is likely shorting out. If it is happening in the track section consistently, it can't hurt to really examine that areas track work, especially since inspection of the pickup assembly didn't turn anything up. Make sure the rails at the track joints are smooth and that the junction is flat and just generally well laid.
You might even just want to slowly roll the caboose over that area by hand with a real close eye on things to see if you can determine what is happening.
