This is deja-vu all over again for me. In 2001 I broke my 240D timing chain while cranking. The chain tensioner rail had failed allowing the chain way more slack than it could handle. The chain actually wrapped itself around the bottom sprocket, and unfortunately there isn't enough clearance there but for one row of chain. The engine locked and the chain snapped. I had to pull the engine to get the upper oil pan off, which had a good sized hole in it from the chain interference. I then pulled the chain out, changed the bottom sprocket, and installed a new chain. There was no valve, piston or cam bearing damage. The engine locked right before it broke, so I don't think the pistons even had a chance to interfere with the valves.

Mike, you may have a different failure mode, but it sounds just like mine. I'd check the area around the crankshaft seal, to see if the chain wrapped itself around the bottom sprocket....you may see a hole in the upper oil pan in that area, if it did. If it didn't create a hole, you may be able to free the chain by rotating the crankshaft backwards a bit. Otherwise you'll never get it out.

Good luck.

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1976 240D
1987 560SL
2007 E320 Bluetec
1998 C280 (now son’s car)
1982 240D Manual - Sold