At 1823 Central time, the airplane sustained substantial damage during a forced landing following a loss of engine power. The commercial pilot, who was the sole occupant at the time of the accident, was not injured. Visual conditions prevailed for the skydiving flight. After reaching the jump altitude of 10,000 feet, the engine began to run rough. A loud bang was heard and oil was present on the windscreen. The airplane owner/skydiver elected to jump out of the airplane with the tandem student and let the pilot attempt a forced landing. During the forced landing, the airplane landed short of the runway and impacted a ditch. The engine showed a hole in the crankcase near the number-four cylinder.