THE ENGINE WAS OVERHAULED AND MODIFIED ABOUT SIX OPERATING HOURS PRIOR TO THE ACCIDENT WITH A NEW TYPE OF CAM SHAFT UNDER THE PROVISIONS OF A SUPPLEMENTAL TYPE CERTIFICATE. THE PILOT SAID HE WAS IN LEVEL CRUISE WHEN HE HEARD A LOUD BANG EMANATE FROM THE ENGINE CONCURRENTLY WITH IT STOPPING. AN INITIAL INSPECTION OF THE AIRCRAFT ON SITE BY FAA INSPECTORS REVEALED THAT OIL COVERED THE WIND SHIELD. THE NUMBER TWO CYLINDER ROD WAS OBSERVED TO BE PROTRUDING FROM A HOLE IN THE TOP OF THE ENGINE CASE. ONE COUNTER WEIGHT ASSEMBLY WAS FOUND MISSING FROM THE CRANKSHAFT COUNTERWEIGHT BLADE. THE MISSING COUNTERWEIGHT, COVER PLATES, RETAINING CIR-CLIPS, AND ASSOCIATED BUSHINGS WERE FOUND IN THE OIL PAN. OPTICAL EXAMINATION OF THE RECOVERED PIECES REVEALED THAT THE RETAINING CIR-CLIP FAILED, ALLOWING THE COUNTER WEIGHT PIN AND THE WEIGHT ITSELF TO SEPARATE FROM THE CRANKSHAFT. THE INSPECTOR DETERMINED THAT THE CIR-CLIP HAD BEEN INSTALLED BACKWARDS.