If it's anything like my missus old 306 DTurbo, then the pulley letting go could be fatal. On hers, the idler pulley from the aux belt let go, the bearings somehow got into the cambelt cover and chewed the cambelt resulting in a fairly large section coming off the actual cam pulley! Not good at all! My 406 2.1TD has got a very loud diesel type sound coming from this area, so I'm hoping that it's just this pulley tensioned up incorrectly and hopefully (fingers crossed) it will be an easy fix.
As far as I am aware, it's not the crank pulley, but I haven't had the inside panel off to have a look so can't confirm that theory (I've also only owned the 406 for less than 2 weeks!
So don't know all that much about the 2.1 engine yet) but have had several Peugeots and am currently driving round in a 1.9TD 405 Executive.
