Raycasthit.point - same place every time! (Unity 3.5)

Hello. I'm trying implement a raycast shooting system for my FPS game. the problem is, everytime I try to instantiate a spark effect at the point of impact, it returns a location of (0,0,0) and creates the spark at that location no matter where I shoot it. Here is the relevent shooting code. Also, I am using Unity 3.5 (this may be the issue). Please note that the rocket contains no problems, only the Gun type. The object this is attached to is a child of the camera. Sickly code:

  case weaponType.Gun :
    var fwd = transform.TransformDirection (Vector3.forward);
    var hit: RaycastHit;
 if (Physics.Raycast(launchpoint.position,fwd,range))
 Instantiate(explosionPrefab,hit.point,transform.rotation);
 print("this could not be more actual");
 print(hit.point);
 }
 }

/////////////////////////////////// full code:

 private var curReload = 0;
 enum weaponType {Rocket, Gun, Melee}
 var reloadTime = 0;
 var projectile: GameObject;
 var explosionPrefab : Transform;
 var currentWeapon: weaponType;
 var Speed = 30;
 var range = 10;
 var launchpoint : Transform;
 private var countReload = false;
 function Start()
 {
 curReload = reloadTime;
 }
 function Update () {
 print(curReload);
 print(countReload);
 if ((Input.GetButtonDown("Fire1")) && (curReload == reloadTime))
 Fire(currentWeapon);
 if (countReload)
 {
 curReload++;
 }
 else
 {
 return;
 }
 if (curReload == reloadTime)
 {
 countReload = false;
 }
 }
 
 
 function Fire(currentWeapon : weaponType) {
 animation.CrossFade("Shoot",0.2);
 countReload = true;
 curReload = 0;
 switch (currentWeapon)
 {
 case weaponType.Rocket :
 var projed =Instantiate(projectile,launchpoint.position,transform.rotation);
 projed.GetComponent(Projectile).speed = Speed;
 break;
 case weaponType.Gun :
    var fwd = transform.TransformDirection (Vector3.forward);
    var hit: RaycastHit;
 if (Physics.Raycast(launchpoint.position,-fwd,range))
 Instantiate(explosionPrefab,hit.point,transform.rotation);
 print("this could not be more actual");
 print(hit.point);
 }
 }