Broken camshaft: 617 '81 SD. How could this happen?

[ROLLGUY]

My neighbor called me today and told me his car made a weird sound and just quit. He coasted to the side of the road, and called me (he bought the car from me years ago). He tried to start it, but told me it sounded like it was not getting compression. I suspected that I would find the cam not turning, or something like that. As soon as I got there, I pulled the oil cap, and sure enough, a piece of the cam was sideways under the cover, and a follower was out of place. What would cause this? I had just changed the oil for him a few weeks ago, so I know it was not out of oil, or that the oil was old. The car has been running great for him ever since he bought it, and he has had no complaints. I have not pulled the cover yet, but I may find a broken timing chain, or gear. Would something like this ruin the bottom end, or just the top (bent valves etc)? He has been bugging me for weeks about buying my car ('98 E300) since I let him borrow it while I worked on the brakes on his car. Today after he had his car towed home, he called me and made me a deal I could not refuse. We made a deal, and part of it is I am getting his 300SD. If it is repairable, I will get it back on the road. If not, it will make a great parts car (I already may have a use for the trans). What do you think? Should I just bite the bullet and pull the head? Or do you think the pistons will be toast, and the engine not worth fixing?