Pony cancer is really a myth. Fading and spots are caused by poor storage over a period of time (excessive dampness, humidity, sunlight, heat, smoke etc.)
Acetone however, I use all the time. You have to be picky which kind you get though, as some nail polish removers that contain acetone can STAIN ponies.
I buy pure Acetone (make sure it is clear and dye free)
I use it during what I call "pre-washing"
I take a cotton swab, dipped in acetone (blot it on a paper towel if it's dripping) and carefully go over any marks or smears on a pony. (Dab rather then rub, so you don't rub in a mark, rather then remove it) then I rinse her, then I rinse her again with soap (just to make sure any trace of acetone is gone) then I get her all clean with ivory soap and a toothbrush.
Remember: stay clear of paint, eyes, blush and symbols - it will erase them in an instant!
Also, acetone may fade dye in some ponies.
Most prone to it are ponies that are already prone to fading (like some Italian ponies) also, Deep blue and purple ponies like seashell.
Always test first on a hoof, on every single pony. (be sure to look carefully after testing under good light) Better to be safe then sorry.
~FF