I'm on the Reunification of skyrim quest line. I have regained Pale, Rift and just completed Winterhold hold. I'm supposed to go back to Solitude and talk to the General but every time I do (via fast travel) some NPC spontaneously catches on fire, a 1000 bounty is added to me, and guards attack. I've tried fast traveling to other cities and nothing happens. I've also restarted my PS3 and it sill happens. It generally takes about 20 seconds after fast travel for the NPC to catch fire and it doesn't have to be a NPC close to me.

What armor are you wearing?

may sound like a silly question but there is enchantments that can set things on fire if they are to close to you.

Just a side note that fast traveling can cause an array of problems. Have you tried approaching without FT?
Try entering the area in sneak mode and maybe an invisibility. Approach the general and see what happens.