My mining rigs have kicked the breaker in my house once, but beyond that I don't have any scary mining stories.

Hardware stories though?
Once I was replacing the thermal paste on my CPU, I got some thermal paste on my hand and didn't wash it off. (That's a BIG mistake depending on what type of thermal paste...)

I now have a permanent chemical burn on my hand from CPU thermal paste...
Any skin I have that grows over the burn dies at a very accelerated rate, it looks like psoriasis.

Whether you're in a pool or not...
Difficulty increases affect everyone equally.

If it gets twice as hard for any individual to solve a block...
It gets twice as hard for any pool to solve a block...
Rewards are decreased accordingly, and nothing maintains the balance except for the BTC/USD ratio.

At the moment, profits are declining, because the value of BTC isn't increasing as fast as the network hash speed and difficulty.

Everything is speculation as far as that's concerned, but the certainties are that as more people join, the higher the difficulty goes, the lower your BTC rewards are.