I have welded quite a few tanks and never had one blow up. I always do it with the cap off and petcock out. I have had a couple shoot flame out the holes but no where near an explosion. I had rinsed them out very well prior to the jobs.
I have popped dents out with compressed air but be careful not to damage a seam. I have also done it by filling the tank to a certain point with water and freezing but the shape of our tanks don't lend themselves to that method. Plus that method it is very easy to split seams or deform the whole tank. Ask me how I know! LOL If the metal is stretched or creased compressed air won't work and neither will the paintless method. On old tanks used to be able to push some of them out from the inside with a piece of dowl or a metal bar but in most cases that would require some bondo to smooth it. You would have to cut the unleaded thingy out of yours to use that method I think.
I learned all I need to know about life by killing smart people and eating their brains. Eat right ,Exercise ,Stay fit, Die Anyway!
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