For starters, this is a GIF demo of how a rotary engine works, I figure I should at least give you something so you don't feel like a retard.
First you'll notice a big spinning triangle type thing, this is the rotor. Being "triangular" it has thee faces and three corners, called apexes. Each of these apexes has a seal, aptly named an apex seal. These seals keep the engine working correctly, I will get to that shortly. There are three phases to this engine, and four processes: phase one intake (light blue circles), phase two combustion and compression (orange), and phase three exhaust (grey circles). Combustion and compression make the engine turn. Each solid metal apex seal prevents these three phases from merging. If an apex seal breaks, the rotor it is on is no longer working corrctly, and it will just spin, leaving the other rotor to work. Each rotor face is carrying out one phase of the engine.
Below is an image of an apex seal in this engine, taken through an exhaust port. This apex seal is broken, very broken, it's practically gone.
There should be absolutely no cracks or chips on that seal. It is very dead, like the engine.
I will have a complete version of my teardown as it continues.