On September 6, 2003, approximately 1340 Pacific daylight time, a Cessna 172RG, N6368R, registered to Heart & Truss Eng. Inc., and being operated/flown by a commercial pilot (right seat) sustained substantial damage during an off airport emergency landing near Blanchard, Idaho, following the loss of engine oil while climbing through approximately 5,500 feet above mean sea level. The pilot and student pilot passenger (left seat) were uninjured. Visual meteorological conditions prevailed and no flight plan had been filed. The flight, which was personal, was operated under 14 CFR 91, and originated from Spokane (Felts Field), Washington, approximately 1315, and was destined for Bonners Ferry, Idaho. The pilot reported that while climbing there was a loud bang and simultaneously a spray of oil across the front windscreen, which obstructed his forward vision. Several seconds later smoke began to develop within the cockpit and the pilot secured the engine and all electrical systems after which the smoke dissipated. The pilot selected an emergency landing site and set up for an off airport landing. He then maneuvered the aircraft over a six-foot deep ditch and then through an electrical fence before the aircraft encountered rough, deeply furrowed terrain. The landing gear collapsed during the landing roll (refer to photographs 1 and 2). Post crash examination of the aircraft's Lycoming four cylinder O-360-F1A6 engine revealed that the three-quarter inch hex head plug at the front of the engine, which retains the propeller governor idler gear shaft, had backed out of its threaded insert (refer to photograph 3 and Attachment FAA R-I). The plug was later found in the bottom of the engine and, although it had a hole drilled in its head for a safety wire, no safety wire was found attached. Additionally, no safety wire segment/pieces were observed on the tie down point on the engine (refer to photograph 4). The propeller governor idler gear shaft, which is held in place by a setscrew accessible only when the engine case halves have been separated, was missing. The setscrew was observed to have partially backed off allowing longitudinal movement of the propeller governor idler gear shaft. With the propeller governor idler gear shaft absent, engine oil under pressure could drive oil overboard through the unplugged hex head plug port (refer to Attachment L-I). According to Textron Lycoming Service Instruction No. 1343A, the threads in the engine case that retain the setscrew are to be peened to prevent the setscrew from backing out (refer to Attachment SI-I). According to the owner, the aircraft's engine had been overhauled on July 20, 1998, 248.2 hours prior to the accident. Additionally, the owner reported that the last inspection (annual) was conducted December 17, 2002, 78.9 hours prior to the accident. Copies from the aircraft's engine and airframe logbooks showed removal/repair of the engine on March 15, 2002, as a result of a prop strike.