The harrowing incident involving the CC-130 Hercules three months ago forced the nine crew members to scramble to safety and left the $35-million plane badly damaged.
An interim report from the directorate of flight safety says the malfunctioning equipment in the rear of the plane was related to an auxiliary hydraulic system.
"The investigation team identified that a stainless steel braided flexible hydraulic line associated with the auxiliary hydraulic-system pump was breached where it routed next to an electrical power cable," the report states.
"The ongoing investigation is focused on the maintenance history of the auxiliary hydraulic system."
The mishap — involving the aircraft and crew from 435 Transport and Rescue Squadron of 17 Wing Winnipeg — occurred in February during a touch-and-go training exercise at the Naval Air Station in Key West, Fla.
The interim report describes how the plane was rumbling down the runway when the loadmaster in the cargo compartment at the back of the plane was all but engulfed in a fireball just as the plane became airborne.
The loadmaster heard an "electrical buzzing sound" and saw an orange "jet-like flame" shoot across the cargo ramp at floor level.
"He then unbuckled his harness and was reaching for the fire extinguisher when an expansive orange fireball erupted, causing him to protect his head with his jacket," the report says.
"Once the fireball receded, he proceeded forward and alerted the crew to the fire while calling for the takeoff to be aborted."
With the aircraft just a few metres above the runway, the pilot was able to put the plane back down on the ground and "aggressively" bring the aircraft to a stop.
With the engines shut down, the nine crew members aboard were able to scramble from the plane and get away while emergency services responded and put out the fire.
Only one crew member was slightly hurt — apparently after tripping as he ran from the burning aircraft.
Photographs of the plane's interior showed extensive fire damage.
No one with the military was immediately available to comment on the report.
The four-engine turboprop Hercules is a transport mainstay for the Canadian Forces, ferrying soldiers and cargo to war zones such as Afghanistan.