It's years after the original post but any engine with that much case damage could very well have transmission damage from the broken drive chain and/or case pieces entering between the gears.
That's what I was thinking, too...looks nasty!
I once bought an engine from Vance & Hines' then-retired pit wrench. He had 2 whole leftovers, one with broken fins. They were said to be 'ready spare parts' for their bad days. When I got it home I stored it for 4 years, then tore it down for a look-see: the chain had fully wiped out the entire face of the tranny case right in front of the sprocket, then someone had very skillfully sculptured [a LOT of] JB Weld across the opening, and then sold the engine. V&H probably bought it with the same grease packed on it that I saw when I got it: when I broke it apart I found 3 large, partially-ground-up chinks of the cases inside. Wrecked the gears forks, oil pump (suction side), and all the ball bearings, but the crank and rods were pristine, still.
