Eventually after you have delivered the TNT to Jaffar you will get a radio call from him that Flags this side-quest. They have turned the TNT into something useful and want you to come to the workshop to talk to them.
The first goal is to get to Jaffar's place at which point you chat up Jaffar, he sends you to talk to Kurt, and Kurt tells you he needs a battery - but not just any battery mind you - a battery fro a truck hanging half off of the overpass that is guarded by a heavy, a Toad, and a bunch of infected. Still with us?
Okay!
So kill the Toad first then clear away some of the regular infected, take out the heavy, and then get the battery out of the truck!
With the battery in hand head back to Kurt and his next request is metal scrap, sugar, and cables. You should already have all that if you have been looting - well, perhaps not the Power Cables thanks to previous quests but still. Trade what you have then go out and gather what you don't.
In the warehouse there are a trio of Toads on top of the cars - so take them down first and then start looting! And hey, maybe get a few extra because you never know when you might need some?
Back at Kurt - he is happy with your scrounging but he needs some time to prepare.
Eventually Kurt will call you on the radio to let you know that he is ready, at which point you return to him and Kurt outlines the deal. You need to get away from the bomb before the firecracker finish going off...
The next stage requires you to wait for night....
So you sneak all the way in and plant the bomb then you see that you have 7 seconds to escape and so you run like hell! And then... And then.... The bomb fails to go off.
Not only does it not go off, Kurt confesses that he was drunk when he built it and so you are probably going to need to go back, open it up and re-wire it. Actually you are totally goting to have to do that.
Sooooo.... Ninja in to the tunnel again, get to the bomb, and bam! It works! Nest? Gone! Tunnel? Open! Well done you!
Now head back to the Safe Zone and rest until day, then hit the marker to turn in the quest and get you your reward, which includes the Blueprint for Kurt's Bomb. Well done!
This was actually fairly easy to do during the day. Just kill what volatiles are in the tunnel. 5 max.