So sorry he didn't make it.
I tried to hatch several Rhode Island Red eggs, ones that were given to me by a friend. Only one hatched, I cracked open the rest a couple of days after they were supposed to hatch and it's like you described, they were just about grown in the shell, but their, what looked like intestines were in a bubble looking thing in the egg. Like that part of them didn't grow, it was really yucky. I asked our extension director and he said sounds like they had issues with their development, or were diseased. How sad. My one is doing very well. I have some other eggs and a different incubator and trying again. I hope they hatch this time and are healthy.
Sorry again about your chick. That's so sad.
:-(