96 Subaru Legacy timing belt change?

My 96 Legacy has 108,000 miles on it. I took it to the garage for maintenance, the mechanic recommended I replace the timing belt and water pump, not due to damage but due to mileage on the motor. He gave the quote and I agreed. Several hours later the manager called to say there was a, "problem" with my car, the harmonious pulley (?) came loose "somehow" causing damage to the sprocket. There were "scuffs" in the sprocket, both pieces needed replaced and I was lucky the belt had not slipped off and destroyed my motor. The sprocket is a dealer only part and he wouldn't know the price until the dealer opens in the morning but the equalizer or pulley thing costs $172. He said the labor on those parts will be free. The manager sounded very uncomfortable talking to me, stammering over words, unable to elaborate on just how this might have happened, quite unlike his usual demeanor. He did not tell me the damage was most likely present prior to them working on my car and they were unable to see it until they were actually working on the car. In fact, his only explanation was that this had just happened, "somehow" several times. I suspect some action on the part of his technician caused this damage. Can anyone explain to me exactly what he is talking about, and how this may have happened? Also, if the garage caused the damage what recourse do I have? Also, if they are not responsible why is he offering free labor? I live in Columbia, MD and the shop is also in the same city. Thanks.