Thanks everyone for the advice.
Aerorich to answer your questions, Omega fuel is pink and the exhaust residue before the crash was light pink. I am not sure of the oil content of Omega, but I'm thinking its 18%. I have heard that the GMS/Tower hobbies engines take a good long time to fully break in.
I believe, however that SandyT hit the nail on the head- at least I hope. When I mounted the engine on the Sportster, I loosened the muffler bolt to turn the exhaust outlet to the side, and I thought I tightened it up real snug. I pulled the engine out and tore it down last night, and I did not see any wear (shiny spots) anywhere inside. I decide to take the muffler apart as well, as I did nothing to it after the crash. I believe I found that there was still a lot of dirt around the lip of the cast part of the muffler wearing on the thin body of the muffler. I think I aggravated the situation when I loosened the muffler screw and then re-tightened it without cleaning it. I found that the muffler screw was in fact snug so I'm hoping that I found the culprit, but still not sure. I cleaned all of the pieces before putting it back together, and will run the engine tomorrow to see if that was the cause of the problem.