On September 1, 2006, about 1230 eastern daylight time, a Cessna 206F, N8411Q, operated by Waters Aero Marine, incurred minor damage during an engine start at Matinicus Island Airport (35ME), Matinicus Island, Maine. The certificated airline transport pilot and the two passengers were not injured. Visual meteorological conditions prevailed. The on-demand air taxi flight was operating on a company visual flight rules flight plan to Knox County Airport (RKD), Owls Head, Maine, under 14 Code of Federal Regulations Part 135. According to the pilot, as soon as the engine began idling after start, he heard "an abnormal engine mechanical noise." He then shut down the engine and requested a mechanic. During a subsequent engine start, the mechanic confirmed the mechanical engine noise, and the engine was again shut down. Hand propping revealed that the engine would sometimes "mechanically jam," and that the alternator drive pulley would turn freely at various points during engine rotation. Further examination revealed a damaged crankshaft gear with two teeth missing, and an "abnormal wear groove on an adjoining third tooth." The Teledyne Continental IO-520-series engine was forwarded to the manufacturer for a teardown examination under National Transportation Safety Board oversight. Aside from the missing crankshaft gear teeth, no other gear damage was noted. The oil sump was removed and the two crankshaft gear teeth were recovered. The oil sump did not contain any additional debris or foreign material. Magneto timing was found to be 25 degrees before top dead center on the left and 23 degrees before top dead center on the right. Both magnetos exhibited normal impulse coupling engagement when rotated in the normal direction of rotation. Installation of the magnetos on a test bench revealed that the left magneto impulse coupling would disengage at 350 rpm and the right magneto impulse coupling would disengage at 360 rpm. A metallurgical examination of the crankshaft gear, the starter adapter gear, and the two fractured crankshaft gear teeth was performed by the engine manufacturer. According to the manufacturer's report, all evaluated metallurgical requirements were met, including core hardness, surface hardness, and case depth. Both crankshaft gear teeth exhibited signatures consistent with overload. Corresponding starter adapter gear teeth, that would have meshed with the crankshaft gear teeth during startup, exhibited "fine" cracking on the loaded side. Teledyne Continental Motors (TCM) Mandatory Service Bulletin MSB94-8C required that magneto timing be performed in accordance with manufacturer instructions every 100 hours. It also noted: "CAUTION: A single 'kick back' while cranking can cause failure of components of the cranking system. Kick back can be caused by intermittent operation of the impulse couplings." The Bulletin also noted that for the IO-520-series engine, both magnetos should be set at 22 degrees before top dead center. The engine had 167 hours since rebuild by TCM, and 10 hours since the annual/100 hour inspection. No additional information was available to determine if any maintenance or pilot actions might have resulted in a kick back.