A possible cause could also be a curved track on either side of the switch. To check this out, simply set up a test track section with a few straight sections of track on all 3 sides of the switch, then run the engine in question through all the turnout and direction combinations and see if there is still the problem. I have resolved more than one fastrack switch problem by adding a straight section of track leading into the turnout, thus moving the curve further away from the switch. even a 5" section addition helped me with numerous issues, particularly with steam engines.
You could also use this test setup to try a different switch of the same size to see if the problem is with the individual switch.
Also check for a loose piece of metal (metal shavings) as this can cause contact arcing.
I have had a switch that was sparking similar to your description. It was on my "to fix" list. I then dismantled my track to make some wiring changes, and after putting things back the same way as before, the sparking problem is no longer there. I have no idea what caused the problem, nor why it went away.
