"I've never been able to part with them, I've never been able to come up with anything that was suitable to do with them that would make me happy," he said.
The smart, loyal Staffordshire bull terrier was hit by a car when she was just four years old, shortly after Blackwell moved to the city from the countryside -- a horrifying moment he said compounded his need to give her a proper farewell.
"I was giving her mouth-to-mouth resuscitation and I tried to get her to the hospital, to the vet, but she didn't make it," he said.
"I didn't want something that was all about her death. I wanted it to be about her life."
So Blackwell didn't think twice when friend Craig Hull, a trained circus performer and pyrotechnician asked whether he'd like to send Gypsy off in style, as the first customer of his fireworks funeral firm, Ashes to Ashes.
"When Craig suggested this I said 'mate I want to be first cab off the rank'," he told AFP, watching the sun set over the glittering waters of Sydney Harbour -- soon to be Gypsy's final resting place.
"I've seen the shell, and I've seen her go into the tube over there, she's over there waiting. I know she's going to make a loud bang, that much I'm sure of."
The Ashes to Ashes story began almost three years ago when Hull's two beloved dogs, German shepherd-Akita cross Zeus and Gyprock, a white labrador-cattle dog cross, died, leaving a "big hole" in the performer's life.
He'd already scattered the ashes of a friend during an aerial routine at an opening ceremony for one of the Olympics -- he won't say which -- and felt his dogs deserved something even more spectacular.
"I thought, 'I'll get a job as a pyrotechnician and I'll send them up in fireworks'. So I did," said Hull.
Instead of the "sad memory of scattering them into the water" Hull said he had a vision of colour and light as his dogs were fired into the skies during Sydney's New Years Eve fireworks display in 2010.
"To be able to scatter someone's ashes like that, scatter them over a huge area in the air," was incredible, he said.
"To be able to look up to the heavens when you send your loved ones off is a pretty amazing feeling.
"And I thought this is so amazing, other people should be able to experience this as well," he said.
For Aus$950 (US$990) Hull will send up the ashes of a pet in a fireworks display complete with soundtrack, catering and a bar.
Animals will be done in groups of four -- Hull said "pet owners love to show photos of their dogs to one another, share the memories".
And he wants to give humans the same opportunity, although people receive a solo show. No one has yet taken up the offer.
Prices start at Aus$4,800, and Hull said he planned to move beyond small shows to incorporating the ashes of the dead into large firework events such as New Years Eve.
He's even investigating the possibility of launching ashes into space.
"It's not everyone's cup of tea but I believe it will become a common thing one day," he said.
"And people are so creative they'll want lots of different things -- they'll want to be spread over four different cities simultaneously, to the second."
A modest crowd gathered beneath the eucalypts to say farewell to Gypsy, murmuring in delight at the sprays of gold, silver and blue and erupting into applause as the last shell containing her ashes exploded.
Gypsy's final moment was marked by a red love-heart firework slowly fading in the smoky sky.
Blackwell, tears in his eyes, leaped elated from his picnic rug, champagne flute raised.
"How was that?!" he exclaimed. "That was Gypsy".