What was found
(CAN) WHILE IN THE VFR PATTERN THE ACFT EXPERIENCED A LOSS OF POWER ACCOMPANIED BY A CHIP LIGHT. THE ENG STABILIZED AT A REDUCED POWER SETTING AND 85 PERCENT NP AND THE CREW MADE AN EMERGENCY LANDING. AN INSP OF THE PROPELLER TRANSFER SLEEVE REVEALED BLUING. THE ENGINE IS TO BE REMOVED AND REPLACED. MFG WILL CONTINUE INVESTIGATING THE EVENT AND ADVISE OF ROOT CAUSE ONCE ESTABLISHED.