i've tried blowing up iron like the quest says, but nothing works. it says i wont get all the iron back, but i've tried 5 stacks at once and still nothing.
I haven't played PO2, but i just had same issue on Direwolf20. The explosion method wouldn't work. However, there was a crafting table recipe for making it! So check NEI and be warned the returns were horrible. It was like 1 block of iron plus one tnt for 4 compressed ingots. Hope that helps.