Possible but not too likely. Testing has shown an arc can be sustained at 240 V under certain conditions (enclosure size, gap, available fault current). Typical residential service served from a 15 kVA or 25 kVA transformer probably does not have enough available fault current to sustain an arc unless you are having a really bad day.
I didn't get a sustained arc as I had a screw fall from ?? across a 240V 200A house panel's bus bars. There was a blinding fireball about 6 inches in diameter that lasted perhaps 100ms. The 200A breaker did trip at this point.
I don't know Keith... Normally, once whatever initiated the arc is vaporized, the arc goes away at 240 V. Not always, though. Even if the arc is sustained, the heat energy is normally not as high as for a 480 V fault. But you are in a class by yourself.
An arcflash can happen and even sustained as what dpc said (bad day)! Welder units have open circuit voltage of around 70 VAC and needs to maintain an arc to do its job!
They keys are:"gap", availability of the conductor(electrode) maintaining that "gap" and the source. If the gap widens fast (conductors melting fast), then the arc dies out quickly.
The truth is, I never had a chance to observe it 'cuz I closed my eyes when I had my bad day once!
