Subsequent investigation revealed that a safety device that was supposed to keep the transfer in the "pump" mode had failed.  Through more research it was discovered that the transfer manufacturer had issued a recall notice to the apparatus manufacturer warning of the possibility of a transfer lock failure.  Unfortunately, the apparatus manufacturer had gone out of business and the recall notice was never forwarded to our department. 

Several good points can be made about that night.  No one was injured, the arsonist was apprehended and we got a new engine compliments of the insurance company and our generous townships.