A malfunction on one engine could account for all that, but absent any other obvious problems (smoke/fire, aircraft oscillations, etc) it seems a lower probability. Bird-strike is also possible, but likely would have been noticed by the many spectators.
Global National video report has an eyewitness Roland Booth in the report who said "All of a sudden you could hear pop, pop, pop, sparks came out of the one engine. The aircraft banked to the side, the next thing the pilot had to bail out..."