Answer: Fat embolism syndrome.
Step 1: The setting is a long-bone (femur) fracture with two organ systems hit: the lungs (hypoxia, PaO2 60 mmHg despite 100% oxygen) and the brain (confusion). This combination after a long-bone fracture points to fat embolism syndrome (FES).
Step 2: Fat globules released from the marrow lodge in capillary beds, causing direct tissue injury and a systemic inflammatory response. This produces the classic triad: respiratory failure, neurological changes and a petechial rash. Onset is typically 24 to 72 hours after the fracture.
Step 3: A clear chest X-ray with severe refractory hypoxia argues against pulmonary contusion, which would show lung opacities, and against the volume-loss picture of hypovolaemic shock. Pulmonary embolism (thrombotic) is far less likely in a child right after a fracture and does not explain the marrow-fat origin and CNS picture as well.
Step 4: Hypoxia plus confusion after a femur fracture equals fat embolism syndrome. Ref: Bailey and Love / Schwartz Principles of Surgery.