On January 27, 1997, about 1015 eastern standard time, a Cessna U206D, registered to Gallops, Inc., operated by Red Baron Aviation, Inc., experienced a total loss of engine power shortly after takeoff from the Tampa International Airport, Tampa, Florida. Visual meteorological conditions prevailed at the time and a VFR flight plan was filed for the 14 CFR Part 135 non-scheduled, domestic, cargo flight. The airplane was substantially damaged and the commercial-rated pilot and a pilot-trainee were not injured. The flight originated about 1008 from the Tampa International Airport. Shortly after takeoff the pilot advised the air traffic controller that the engine failed. The pilot maneuvered the airplane and while flying near a residential area, the pilot elected to land the airplane in the Hillsboro River. After touchdown the airplane nosed over and came to rest inverted in 10 feet of water. The airplane was recovered for further examination. Preliminary examination of the engine revealed that when the crankshaft was rotated by hand, there was no movement of the pistons in cylinder Nos. 1 and 2. The No. 2 cylinder was removed which revealed that the crankshaft was failed. The engine was crated and shipped to the manufacturer's facility for further examination. Visual external examination of the engine revealed a hole in the left crankcase under the fourth backbone bolt hole from the front of the engine. Random testing of the break away torque values of the cylinder hold down nuts and through bolt nuts revealed less than specified. Material similar to engine bearing was found in the oil sump and at the oil pressure relief valve seat and plunger. Scoring of the interior walls of the oil pump was observed however the oil pickup tube screen was free of obstructions. The remainder of the cylinders were removed and the crankcase halves were separated. Examination of the crankcase halves revealed fretting of the main bearing saddle supports between the Nos. 2 and 3 main bearings. The No. 2 main bearing was partially broken and extruded and extrusion was also noted to the bearing saddle. The crankshaft was observed to be failed at the No. 3 crankcheek. Examination of the recovered bearing pieces revealed shapes consistent with the fillet radius of the crankshaft journal adjacent to the No. 2 main bearing. Examination of the No. 3 main bearing revealed evidence of movement of the bearing halves. Visual examination of the crankshaft by a metallurgist with the engine manufacturer revealed fatigue followed by instantaneous overload failure. Review of the maintenance records revealed that on August 11, 1996, overhauled cylinders were replaced at a tachometer time of 1736.6 hours. The Director of Maintenance who performed the work stated that during the installation process he applied engine oil to the threads of the cylinder studs and through bolts as required by the overhaul manual. On January 25th and 26th, cylinder Nos. 1, 2, 4, and 6 were removed and the rings, seals, and gaskets were replaced due to a pilot report of lack of power and the maintenance finding of low compression in those cylinders. The work was partially supervised by Director of Maintenance for the company; however, torqueing of the cylinder hold down nuts and through bolt nuts was performed by another company employee. The maintenance records for that work were located in the airplane and were not located following recovery of the airplane. Following the cylinder installation, the airplane was test flown by the Director of Operations with no discrepancies noted and the airplane was also flown earlier in the day of the accident by the accident pilot with no discrepancies noted. The engine had accumulated 423 hours since the cylinder removal and replacement in August 1996, and about 1 hour since the four cylinders were removed and reinstalled several days earlier. The wreckage minus the retained engine was released to Mr. Steven M. Homenda, of Loss Management Services, Inc., on February 10, 1997. The retained engine was also released to Mr. Homenda on August 5, 1997.