AT APRX 2500 MSL, THE ENG STOPPED AND ATTEMPTS TO RESTART IT WERE NOT SUCCESSFUL. THE INSTRUCTOR TOOK CONTROL OF THE ACFT AND ATTEMPTED TO LAND ON THE HIGHWAY, BUT THE ACFT STRUCK POWERLINES AND A TELEPHONE POLE BEFORE NOSING OVER AND COMING TO REST. THE ENG WAS REMOVED FROM THE ACFT AND SUBSEQUENT TEARDOWN REVEALED THAT THE CRANKSHAFT GEAR TEETH WERE SHEARED. APRX 140 HRS PRIOR TO THE ACCIDENT, A REPAIR STATION HAD RE-NITRIDED THE CRANKSHAFT FOLLOWING RE-GRINDING OPERATIONS, HOWEVER, THE PRESSED ON TYPE GEAR WAS NOT REMOVED, AS REQUIRED, PRIOR TO RE-NITRIDING. SPECIFICATIONS STATE THAT THE GEAR SHOULD HAVE A MIN ROCKWELL HARDNESS OF 30N-77 AND THAT ANY TEMP IN EXCESS OF 300 DEGREES F WOULD AFFECT THE HARDNESS. WHEN TESTED, THE GEAR EXHIBITED A ROCKWELL HARDNESS OF 30N-39. THE TEMP REQUIRED FOR NITRIDING IS IN EXCESS OF 985 DEGREES F.