Another "Wow !" and the "Lots of Trouble" award is well deserved for such a unique and devious breakdown !
Joking apart, that's incredibly hard luck and something I've never seen before. In fact I'm struggling to think how the engine could run for so long after being assembled and then suddenly fail, I'd have expected an assembly fault like that to show itself in the first few miles.
But as John says, something is wrong and the cause needs to be found before starting over. I'm a bit hazy without a distributor in front of me but I'm wondering if the spiral cog on the bottom is pinned to the distributor shaft on these engines and if that's loosened. Hard to see how other than an undersized pin but I'm struggling anyway.
The other thought was if the distributor clamp plate had loosened where it grips round the distributor body. It's hard to see how it could come off the engine block without losing the timing and being obvious before it came loose enough to wreck the gears, but I suppose it might not be gripping the body tight enough and the action of rotating on the spiral causes it to jump teeth. (before slipping back down & smashing itself....)
If you can manage it, some photos of the damage might help others to avoid the same thing ?
JB gives what I consider a pretty convincing argument that the cassette water pumps are not called for on the Europa since there are no ancillary drive belts (such as an alternator as on the Elan) that could put pressure on the bearings. You might consider replacing your water pump v-belt with a gilmer belt. This would further reduce the stress on the bearings. I don't have any experience with the TC water pump but based on my experience with my water pump gilmer belt, I would expect the gilmer belt would be easier to replace than the v-belt.
I've kept to the OEM pump as well, without an alternator/dynamo bracket where the owner can apply so much force that it breaks the bearings the Europa pump lasts a long time. And I'm sure I remember Mike Walters saying at a Club Lotus seminar that they never had premature failures with the TC Europa (and only a handful with the Elan - but they'd mostly be dealer serviced back then)
Miles Wilkins is also an advocate of the OEM pump and in his books he reckons the "waterpump failure" is a myth. True, if it goes wrong then it is a Head/sump removal job, but you'll do the same thing to fit a cartridge pump and even then you've got access problems to replace it. In fact I'd check that a cartridge can be replaced with the engine in situ before going ahead, it's different on the Elans because once the radiator is out you have easy access but we have that bulkhead on the Europa.
Looking forward to the diagnosis and verdict.....
Brian