Major engine failure on take off

I am no expert on this sort of diagnosis, but the top of that piston looks a total mess.  Detonation?

You'll need to file a claim with Rotax. File a CSIR (customer service information report). You will need to copy your engine logbook and send it with the CSIR. Write down all damage noted and if any other cylinders were involved and take pictures of things you find. If you are close enough get a Rotax service center involved. I do hope you did and recorded the required 25 hr. warranty inspection in your logbook.

I can't quite see well enough in the picture, but it looks like you have signs of detonation on #2. Is that the only cylinder affected? There are a bunch of questions that would need to be answered. These things are usually owner caused. Things like wrong octane fuel, wrong plugs, modification of the engine, if engine went too far over max rpm or boost, screws have come lose and gone into cylinders....ect...

Just an observation:

If you don't have a constant speed prop it can be easy to exceed allowable rpm with the 914 because it will continue to make 115 hp at altitude where the air is thinner. So if you are pitched for high rpm at sea level you can blow past 5800 at altitude. 

Thank you for your assistance. I will keep this forum posted on updates. I cannot find any similar issues with the 914 engine. There is a large gap where the conrod has been pressed into the crankshaft. This doesn't appear in any of the other conrods, and looks very suspicious. The damage to the piston is due to the rings failing. 

We feel the crankcase movement may have contributed to the engine failure.