Now, I made a neat clusterbomb.
But there's just one little malfunction.
It's supposed to be many little explosions, like about halfway into this GIF.
But see what actually happens...

Obviously there's something very wrong with my Spread, but I have no idea how to fix it. Issue here is that far too many bombs are being spread downwards instead of upwards/sideways.
Yes, that big mushroom is cool, but it lags the game to all hell, and as such, I don't want it.
http://www.pastebin.ca/1307510

Best way I've found to ensure that gibs go up and not down is to make the original bomb gib only an AEmitter that's set to emit upwards all the rest of the stuff you want.

Just by looking at it... any chance the grenades are getting hit by shrapnel/eachother and exploding midair?

Try HitsMOs = 0 for the spawned explosives. That might help. Or use OrientToVel = 1 for the first one and set the spread of those clusters to 1.5. Should cause everything to go 180 degrees away from the surface it collides with, as the explosive rebounds from it before being gibbed. I think. At least if it goes fast enough.

it will, because stupid stupid explosives wont explode towards something unless they have a negative bounce value on their material..

to big of explosions and put air thruster ball velocity down

Uh, no.
The code for the initial explosion is exactly the same as the code for the final explosions, which aren't like that at all.
The problem here is that the clustered bombs are being launched into the ground and promptly exploding.
Not getting hit in midair, not too big of an initial explosion.
Just that they're getting gibbed into the ground.
Didn't fix it.
Explosion is just as big as it was before, possibly bigger.

Have you tried an emitter? That's probably your best bet. Have the dropped bomb explode into a pinned mosr with a very rapid release aemitter. Possibly several to make it REALLY damn fast.