Both sentences leave out a part:
I was thinking about punching him and breaking his teeth.
I was thinking about punching him and [I was thinking about] breaking his teeth.
Here, because punching and breaking are both present participles, the reader will read this as if you left out the whole [I was thinking about] part. Without that part, the second part of the sentence does not make sense.
You were thinking about two things.
I was thinking about punching him and broke his teeth.
I was thinking about punching him and [I] broke his teeth.
Here, was thinking [about punching] and broke are complete different forms of verbs so the only thing that seems left out is I.
In this case, you give the impression that you broke his teeth by thinking about punching him. Quite a feat, if you ask me, but probably not what you wanted to say!