In 1993, Dr. Robert Ballard, the famous explorer who discovered Titanic and Bismarck, conducted an in-depth exploration of the wreck of Lusitania. To explain the second explosion, Ballard advanced the theory of a coal-dust explosion. He believed dust in the bunkers would have been thrown into the air by the vibration from the explosion; the resulting cloud would have been ignited by a spark, causing the second explosion.
In the years since he first advanced this theory, it has been argued that this is nearly impossible. Critics of the theory say coal dust would have been too damp to have been stirred into the air by the torpedo impact in explosive concentrations; additionally, the coal bunker where the torpedo struck would have been flooded almost immediately by seawater flowing through the damaged hull plates.
More recently, marine forensic investigators have become convinced an explosion in the ship's steam-generating plant is a far more likely cause for the second explosion.
The original torpedo damage alone, striking the ship on the starboard coal bunker of boiler room no. 1, would probably have sunk the ship without a second explosion. This first blast was enough to cause, on its own, serious off-centre flooding, although the sinking would possibly have been slower. The deficiencies of the ship's original watertight bulkhead design exacerbated the situation, as did the many portholes which had been left open for ventilation.
Source: http://en.wikipedia.org/wiki/RMS_Lus...#Controversies