Am I the only one who doesn’t really care as to whatever Discord dangled ponies over fire or not? I mean, it’d be nice to know the truth, but I wouldn’t really care if the show never answers the question. And let’s face it; it probably won’t.
 
Discord is just such a better character now that he’s not evil anymore, but just an incurable prankster with a huge ego and a soft spot for Flutters. Whatever happened before he was reformed doesn’t matter anymore. Remember when some people felt it was not a good idea to have him no longer be a villain? Oh my gosh those guys were so wrong.

@Background Pony #EE0F  
I agree, but I don’t think Discord was above playing terrifying pranks. Things like making ponies play the actual hot lava game (you know when kids pretend the floor is hot lava? Imagine if it was), or dropping fireproofed ponies into a blazing inferno so they think they’re going to die and then it turns out Discord’s magic is protecting them. He could easily have done something like this, if it ended non-fatally and with no serious physical harm done to his victims (mental is another story.)
 
Or, it could be a metaphorical representation. Discord’s puppet controls signified him setting ponies up to have their minds screwed with and be set against each other, when we saw him actually use them. The “fiery” anguish these ponies seem to be suffering could be mental – a pony in despair, feeling that his life is over and that his friends and loved ones have abandoned him, because Discord has convinced him they hate him; a pony screaming in denial, calling for her family to come back to her as they walk away, no longer even seeing her; a pony so apathetic and depressed she can barely bring herself to fly, because she’s been discorded to believe she has to reject everything she used to love and do things she hates and she can’t bear it. Discord’s darkest and nastiest work was always psychological torture, not physical.
 
Psychological torture doesn’t show well on a stained glass window, so the artist drew in fire to signify the anguish the ponies were suffering, not because Discord really did dangle ponies in fire. Although he might have, on occasion; he wouldn’t have let them be hurt or killed, but they didn’t have to know that.

I and several others do think it’s just an embellished part. There are two reasons I think this: