On February 5, 1999, about 1000 eastern standard time, a Piper, PA42-1000, N37KW, experienced an uncontained failure of the right engine during a descent for landing at the Blue Grass Airport (LEX), Lexington, Kentucky. The certificated airline transport pilot and passenger were not injured. Visual meteorological conditions prevailed and an instrument flight rules flight plan had been filed for the flight that departed the New Castle County Airport, Wilmington, Delaware, about 0800, destined for LEX. The personal flight was conducted under 14 CFR Part 91. In a telephone interview, the pilot stated the airplane was descending through 19,000 feet, when he experienced a momentary fluctuation in engine torque for the right engine. Shortly thereafter, he heard a "loud explosion," and observed flames emanating from the airplane's right engine cowling. He then secured the engine which extinguished the fire, and declared an emergency. The airplane landed at LEX without further incident. Examination of the airplane by a Federal Aviation Administration Inspector, revealed extensive fire damage forward of the right engine firewall. A 12 inch, by 24 inch hole was found burned through the upper engine cowling. A 5 inch, by 10 inch hole was found in the upper engine case near the combustion section, and a 1 inch, by 3 inch hole was found in the engine inlet gear case housing. Additionally, damage was observed at the first stage compressor blades. The engine, an AlliedSignal, TPE331-14B, was retained for further examination. The engine was disassembled at AlliedSignal, Phoenix, Arizona, under the supervision of a Safety Board Investigator. The disassembly revealed that the gearcase was ruptured in the 1st bull gear's plane of rotation. Additionally, the 1st bull gear had a 90 degree arc of the rim, and gear teeth separated. The combustor plenum was also ruptured; however, the turbine disks, which were located underneath the combustor, were all intact. According to the Safety Board's Metallurgist factual report, the examination of the 1st bull gear revealed a fatigue fracture that originated in the gear's bore splines. The fatigue originated in an area where the spline thickness was significantly reduced by indentations on the pressure surface of the splines. Review of the engine maintenance records revealed that at the time of the incident, the engine had 3,535.1 hours time since new, and 768.1 hours since the last overhaul, which was performed by AlliedSignal. Additionally, the gearcase was disassembled, and reassembled during repairs, which were performed by AlliedSignal on November 19,1996. Review of the engine's overhaul manual revealed a tie-rod was used to provide a clamping force between the spur gear and 1st bull gear. The assembly procedures required that the tie-rod be stretched with a load of 22,000 pounds, and then secured with a nut that was hand-tightened. During disassembly of the gearcase, it was not possible to determine the amount of stretch on the tie-rod, or the breakaway torque on the retaining nut. As a result of the investigation, AlliedSignal advised that it would be revising the TPE331 engine manuals and assembly procedures to require a measurement of stretch on the tie-rod before and after the nut is installed and require that the retaining nut be torqued to some value greater than hand-tight.