The problem with simulator instructors is that they can dream up many situations where there is very little margin for a successful outcome/survival. Lets face it you could devise any number of scenarios where death is the probable outcome. You haven't mentioned whether the engine with the firelight is still producing power - but late in the post you say it is now night time. The answer - put it on the deck - it is the most survivable of a number of poor choices.
GAGS
E86