Duane
OK, so lesson 1 is that it is possible to strip defective wood off of the tube, and replace it.
So what is lesson 2. A reasonable question in this situation is why did the wood crack, and is there something that you could do differently to prevent cracking.
There are three possible causes for cracks like this. One is that the blank was cracked before you started, and you just didn't notice. That's a common problem, and the solution is to carefully inspect the blank at several key points along the way so that you can detect the flaw earlier in the process. One suggestion is to tap the blank against the lathe bedways - with a little experience, you can detect a hidden crack from the sound that makes; a hidden crack will cause the sound to be 'dead'. But if the blank is intact, the sound will ring, much like striking a musical instrument.
Another cause is, as others have mentioned, is doing something that distorted the tube - using excessive force when mounting the blank for turning can cause a problem, but its also possible to cause a crack while assembling the final product. That's a common problem with pens if the components are not lined up exactly when you press them into the tube.
Another cause is that the blank was green - that is, it had not been dried fully prior to turning. As wood dries, the fibers in the wood shrink - that's a basic and unavoidable consideration with wood. Wood is a natural product harvested from trees, and as it dries, the natural shrinkabe will be relatively minor longitudinally (along the length of a branch or trunk of the tree), greater radially (from the center of the branch or trunk outward), and much greater circumferentially (around the circumference of a branch or trunk). The crack in your case was aligned with the grain of the wood, which means that it was likely circumferential shrinkage. If a blank is mounted on a brass tube (which is rigid and can't change size), that shrinkage will cause cracks. Wood never dries completely, but it should dry to the same lever of moisture as the environment. You can use a moisture meter to measure how wet the wood is, or you can just store the blanks for a few months to allow them to dry enough to be in equilibrium with the environment. But turning a blank that you bought just this morning without testing it for moisture content is risky.
Finally, heat can cause cracking like this, and blanks can easily be overheated if you sand too agressively. Remember that after you have turned a piece, the wood is actually very thin (supported by the brass tube), so heat from agressive sanding at that point can attempt to dry the wood beyond the equilibrium point with the environment causing cracks.
