At 0943 Pacific time, the airplane was ditched in the ocean following a loss of engine power during departure. The Instrument-rated Private pilot and one passenger sustained fatal injuries; a third occupant was not located. The airplane sustained substantial damage. Visual conditions prevailed. The airplane impacted the water about 250 yards off the Santa Monica beach. It submerged in 20 feet of water. The pilot and one occupant were recovered from the airplane. The airplane was also recovered and its engine examined. The engine case had a hole that stretched between the top cylinder base nuts of cylinders 1 and 2. The hole was approximately eight inches across and six inches at its widest section fore and aft. The number 2 cylinder connecting rod was visible through the hole and portions of it and the connecting rod cap were fractured from the rod end. A 2.5-inch portion of the connecting rod from the crankshaft end contained the top portion of an attachment bolt and was located loose within the engine, just below the connecting rod.