The car probably sat for a long time, allowing the rope seal to dry out. Then a new enthusiastic owner romps on the car a bit, allowing the spinning crank to abrade the dry seal and allow the engine to reprise the grounding of the Exxon Valdez...

If I had the funds, I would definitely put some money into this car, particularly if it is confirmed that the engine and paint color are original to the car. 1966 and 1967 were arguably the best years of any generation of the E-Type (Series II? Yecch!), and a 1966 BRG roadster has nowhere to go but up in terms of value.