Runout is not a reliable indicator of damage. The prop may have
struck the surface more than once and bent the flange back from the
worse position it had been bent to on the first contact. Any bending
can crack a crank and the flange will dial OK; I've seen it on a couple
of O-200s we used to operate. I had an A-65 crank break in flight
between the first and second journals (rearmost and next ahead, the
farthest position from the prop) and I have read that these engines
tend to break at that spot after a prop strike. Flange runout, of
course, would have indicated nothing about the other end of the crank.
A propstrike also twists the whole crank (inertia) and cracks can
develop at the journal fillets; seen that, too. Runout readings won't
tell you everything about twist. The rest of the components, like rods,
pistons and gears, get shocked and will often show cracks or
deformation. Lycoming has an AD requiring teardown after any sudden
reduction in RPM, including contact with "grass, water or similar
yielding medium." Seems that the bolt that retains the crank gear on
its rear end comes loose and eventually the gear falls off. In flight,
of course. The camshaft and everything else stops turning.

Dan