
Simple stated: When KARR appeared in Season 3, KITT noted that KARR was leaking turbine fluid. I have no clue how volitile or powerful the turbine fluid is in the KR universe, but could it be possible that when KARR fell off the cliff in season one, he leaked some turbine fluid on the way down. Then upon hitting a rocky surface below, the friction between stone and metal sent up sparks, which ignited the fluid and created the explosion we saw. The resulting explosion created a hole for KARR to fall into, from which the sand tossed up by the explosion fell on top of him, burrying KARR until season 3.
Stretching I know, but is it even plausible?