After pulling off the front of the engine and the timing belt covers, I could see that the belt had shredded. Once it mixed with the leaking coolant, it made a serious mess of the engine bay.
It appears that the belt walked toward the front of the cam gears over a period of a few weeks. As it rubbed against the edges along its path, the belt eroded. It was reduced to about 2/3rds of its original width before it finally slipped completely off the cam gear. I suspect that the noise I heard was the belt slapping the metal belt cover.
I started the process of cleaning up the mess so I could find out why the belt was traveling off the edge. The engine bay was full of belt shavings.
Even the air filter had collected some of the shavings. I know that the damage happened over a relatively short amount of time since I had examined the filter only a few weeks earlier, and it was clean at the time.
After a few hours of cleaning, the engine bay was clean enough to begin hunting for the reason why the failure occurred.
At this point, it looks like the failure occurred because of a $13 part. This bolt holds the tensioner arm in place. As you can see, it is bent and probably allowed the belt to slant slightly, leading it to wander toward the edge of the gear. It was the popular opinion that this bolt probably bent due to being over-torqued. There's no way to know for sure at this point. It could also be due to the belt being too tight.
The source for my inspiration to make the decision to fix my 928 rather than part it out was the 928 Forum on Rennlist. As soon as the failure occurred, I started a thread about it. You can read the thread here. As I pulled parts out, I figured it was a good time to degrease and make them as clean as possible.
