Lots of bad info in the above posts.
The aircraft was outbound from Diego Garcia about 100nm & 15,000 feet when it suffered an engine failure/fire of some sort. The crew turned back to RTB and made it to 30nm point from the base, when control was lost, probably due to burned through hydraulics. The crew was in the water about 2 hours - nice warm water, & no sharks, according to the aircraft commander. Rescue crews did a great job. Evidently picked up by a US destroyer in the area.
It's doubtful that they'd be refueling that soon after takeoff. A KC-10 evidently did provide rescue CAP until dedicated rescue assets could get in the area. In any case, it was NOT a refueling mishap.
Another thing - the B-1 cost about $275 million (1986 dollars), not $140 million.
File under heading of "s**t happens."