Engine failure on take-off

[skymstr02]

Until you get the engine cowling off, and inspect what you have, you don't know exactly what the problem could be.
The oil doesn't necessarily mean that the prop seal failed, it could come from somewhere else.
Depending on where on the blade that the nick is, is dependant on whether or not the blade is repairable.
If you threw a rod, and that's where the oil came from, and what caused the FOD on the blade, then that would be catastrophic.

IF you upgrade engines to a different type, then you would have to replace both engines, not just the rear one.