From the analysis, it looks like a piece of foam estimated to weigh about 2.7 pounds broke loose from the ET, either at the top of the liquid hydrogen tank or the bottom of the liquid oxygen tank. That foam had been exposed to super cold temperatures for well over an hour before launch. From an article in the New York Times over a week ago, according to a plastics expert, the foam would become something like 6 times as hard when that cold as compared to room temperature. If memory serves, he said its compression strength would increase by a factor of 15.

The Shuttle was going Mach 2 when the foam broke loose. I've read that the estimated relative velocity between the foam and the Shuttle's wing was as high as 500 MPH. Even if the foam didn't get harder, a chunk that heavy and going that fast can do damage. I've seen firsthand how straw can be driven into a telephone pole in a tornado, and that's less than half as fast as the impact speed of that foam. If, as I suspect, the foam was a lot harder due to the cold, then it might have done a lot more damage than the original analysis estimated.