The engine ran out of oil pressure (plenty of oil in the crankcase) before the main failure of the rod. The customer was unable to get off the road immediately once he heard the engine knocking (was on the freeway). Had this been a failure due to hard riding and the crank/rod failed firstm there would not have been all the galling on the cams as we see here. So, in my opinion there was a lack of oil pressure first then failure of other parts after that.
Something caused the recall in the first place (an oil pump failure somewhere in the world) so I don't see why it is so inconceivable that it could not have happened again in this instance.
Also, to note, There hasn't even been many failures after the recall work was done (2 that I am aware of and I have one of those engines in my possession as well). Either way these engines are FAR more durable then the gen 1 and I know this is an anomaly that isn't indicative of the quality that is built into these.
I am unsure if I can salvage this set of cases but will be looking deeply into it to decide if it can/should be done. Worst damage is to that one cylinder (which most of the damage will come out with the removal of the sleeve) and the damage I am most concerned with is to the counter balancer bearing saddles in the block.
Check out the gen 1 vs gen 2 trans pics to get an idea how much larger the gears are.