That has got to be either a headspace issue or a seriously oversized chamber.

I'd send it back with those fired cartridges.

What brand is this gun?

It's probably not the gun.
I had an Armalite last year that spit out cases that looked EXACTLY like that....
With HSM ammo.

Try some other loads before you freak.  If FEDERAL 556 stuff, WWB and Hornady all do the same thing - then you know it's the gun.
But I think it's the AMMO in this case.  I think the ammo is too hot on the pressure and forcing the bolt to open too soon.  That's what it did to the Armalite.  And it can be the loading is fine as far as charge goes... but it could be a wrong powder or a bullet setback issue that is spiking the pressure because of a weak crimp.
Clean and Lube the gun properly before you shoot it again.

Thanks Ogre, will do that!

Now if it's doing the same thing with other loads - Then it's the gun.

Well, its doing it with the remington 223 as well.

Hmmm... I didn't catch the Remington bit.
Have a gunsmith check your chamber.

That may be others experiance with them, but took it back no problem and quoted me two weeks on a replacement. 

  Might be firing out of battery.  Cease shooting it and have a good gunsmith check it out.

Wouldn't that result in the shoulders being blown out or head separations though?

It is a Vulcan/Hesse.

  Fail.

  I can't see the pics but sounds like you're right, Jesse.