Thanks Andy, I have read much of that info before.
I record the news so that I can watch it later. I was able to watch the clip a few times, and in slow-mo when it showed some guy carrying the wheel spat that had separated from the aircraft. I was looking for any damage to the spat where the screws mount it to the brackets around the wheel. There was a reasonable chunk missing, which suggests it was ripped off when it hit the water OR may have been cracked and came of in flight as suggested...
"Robert Pryor of Long Jetty was an eyewitness to the crash and said he saw "something like a wheelcover" come off the plane."
...here: http://www.dailytelegraph.com.au/newslocal/central-coast/joy-ride-turns-to-tragedy-after-microlight-aircraft-crashes-into-tuggerah-lakes/story-fngr8h0p-1226591695159
So it may be possible for it to have gone through the prop resulting in damage to the wing etc.
So - preflight check your spats for loose screws, cracking and weakness.
I would really appreciate knowing what happened. Are there more of these types of accidents waiting to happen. I guess that is always in the back of our minds, and knowing what went wrong is a big step to preventing it happening again.