It may be possible that a hyd failure (given the heavy pedal loads hyd out on the squirrel) might be misdiagnosed as a TR problem, especially at night in sh*t weather over the water (not in everyone's comfort zone).
...but this accident happened at daylight in good WX!
And the official statement of the BFU-inspectors was, that the T/R driveshaft failed. And i think, that they should be able to determine wether the shaft broke in flight or at the impact on the water surface. Just my 50cts....
skadi