Pilot reported engine failure in cruise; resulting in an in flight shut down and diversion to make a precautionary landing.

Narrative

Aircraft X experienced and catastrophic engine failure necessitating an engine out landing at ZZZ. Aircraft sustained no damage on landing and on inspection appeared to have a piston rod extending from a crankcase hole at the base of the number 2 and 4 cylinders. On the incident morning at XA26 the Pilot in Command and Pilot not Flying (Certified Flight Instructor) departed ZZZ1 on an IFR flight plan We were operating Aircraft X. The purpose of the mission was to fly to ZZZ2 to pick up patients to ZZZ1. The patients were to transfer to another aircraft to transport them to their destination in the ZZZ3 area. At XA00 we picked up our IFR clearance and took off via the ZZZ1 departure. On climb out passing 12;500 feet at approximately XA42 we noticed a gradual loss of Manifold Pressure (MP) to 24 inches with no apparent loss of power. I initially did not request priority handling since I had experienced this loss before and thought it was just a failure of the turbo charger waste gate spring and requested diversion to the ZZZ4 Airport for our mechanic to look into. Shortly thereafter; the engine appeared to start running rough and missing occasionally. I then requested change of destination to ZZZ1. The engine roughness and missing intensified and I noticed the oil pressure drastically drop to 10 inches. We attempted to shut down the engine with mixture to fuel cutoff; but the engine continued to smoke and produce power. I then turned the fuel selector to off. While this was going on; I [requested priority handling] with approach control and told them we were landing at ZZZ. We continued to monitor ZZZ approach control and started transmitting on ZZZ common traffic advisory frequency stating our engine out and our intentions to land on Runway XX. Landed at XA57. After landing we were able to coast to taxiway Delta and clear the runway. We were then towed by [the FBO] to their hangar to investigate the engine problem. At first glance after cowl removal the engine appeared to have a piston rod extending from a crankcase hole at the base of the Continental IO550's number 2 cylinder as well as a hole in the 4 cylinder base.