AN ATX SMT WENT OFF THE RWY AFTER SHUTTING DOWN AN ENG INFLT.

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THE FLT DEPARTED ASW AT XX33 AM FOR ORD. WE WERE IN HVY RAIN 10000 FT ALT. WE HAD A R ENG FIRE LIGHT THAT ILLUMINATED. THE CAPT SHUT DOWN THE ENG AND FEATHERED. WE DIVERTED TO GYY ARPT. BECAUSE THE CAPT DID NOT DECLARE AN EMER AND REQUESTED PRIORITY HANDLING WE SHOT THE VOR/DME 2. RWY LENGTH 3606 FT FOR RWY 2. WINDS WERE 120/10 AND PREFERABLE RWY WOULD BE RWY 12 WITH 7000 FT AVAILABLE. CAPT DECIDED TO LAND THE RWY 2 INSTEAD OF CIRCLE TO LAND RWY 12. UNFORTUNATELY THE ACFT HAD TOO MUCH SPD. THE ACFT WAS PUT ON THE RWY WITH 2000 FT AVAILABLE. RWY WAS PUDDLED HEAVILY. BECAUSE FULL REVERSE WAS USED ON THE AVAILABLE ENG; THE ACFT WAS TAKEN L OFF THE RWY. UNFORTUNATELY THE ACFT'S L PROP BLADE REMOVED THE RWY LIGHT CAUSING A BLADE REPAIR. FORTUNATELY HVY PUDDLING HELPED STOP THE ACFT BEFORE ANY OTHER DAMAGE WAS ENCOUNTERED. THINGS THAT SHOULD HAVE BEEN DONE: DECLARE AN EMER EVEN THOUGH IT WAS NOT FAVORABLE TO THE COMPANY; CIRCLE TO LAND TO THE LONG RWY. NO FIRE WAS VISUALLY SEEN. THE FIRE DETECTION LIGHT WAS SAID TO GO OFF IN HVY RAIN. CAPT SHOULD HAVE BEEN TOLD BY COMPANY THIS SIT HAS HAPPENED PREVIOUSLY. CALLBACK CONVERSATION WITH RPTR REVEALED THE FOLLOWING INFO: THE RPTING PLT WAS TRULY AN OBSERVER IN THIS INCIDENT. HE HAD JUST BEEN HIRED BY THE COMPANY AND WAS NOT YET CHKED OUT IN THE ACFT BUT WAS ALONG FOR THE RIDE. THERE WERE 2 PAX ALSO AND A LITTLE CARGO. THE PIC NEARLY PANICKED AND NEEDED A LOT OF HELP FROM THE RPTR. THE WX WAS GOOD UNDER THE CLOUDS; SO THERE WAS PLENTY OF ROOM TO MANEUVER TO THE LONG RWY. THE PIC CHOSE TO LAND ON THE SHORT RWY AND WENT OFF OF THE RWY DAMAGING THE NOSE GEAR AND THE OPERATING PROP. THE RPTR STATES THAT THE PIC IS NO LONGER WITH THE COMPANY. HE ALSO STATES THAT THE AVIATION MGR DOES NOT LIKE FOR HIS PLTS TO DECLARE AN EMER UNLESS THEY 'SEE SMOKE OR PAINT BUBBLING.' THE RPTR RESERVES THE RIGHT TO DECLARE AN EMER ANY TIME THAT HE DEEMS NECESSARY. PRIORITY HANDLING WAS REQUESTED AND RECEIVED.