Terry is correct concerning the location. Porter's "Incidents and Anecdotes of the Civil War" is available in a 1997 reprint edition, so you should be able to get a copy through interlibrary loan. Porter describes seeing some scruffy looking characters aboard the boat and having them removed shortly before the explosion. He makes the comment about identifying the sound of a torpedo, then personally launches the lifeboats and saves the crew. Very colorful description, but as before stated, since the information comes from Porter, it must be taken for what it is: an oak tree of a tall tale built around an acorn of truth.
"My theory was that the fellows put ashore at Bermuda Hundreds had planned to capture General Butler and destroy the Greyhound, and I believe they were provided with torpedoes to throw among the coal, which they could easily do when the firemen's backs were turned. They could also have saturated the wood-work in the vicinity of the engine and fire-rooms with tar-oil with very little chance of detection.
"When the torpedo was thrown into the furnace with the coal, it soon burst, blowing the furnace-doors open and throwing the burning mass in the fire-room, where it communicated with the wood-work. Perhaps the shell may have contained some volatile matter which caught the saturated wood. We were furnished with such shells ourselves during the war, but never used them. . .
"In whatever manner the Greyhound was set on fire, I am sure it was not one of the ordinary accidents to which all ships are liable. In devices for blowing up vessels the Confederates were far ahead of us, putting Yankee ingenuity to shame."
Porter, "Incidents and Anecdotes", p. 266.