THE INSTRUCTOR PILOT HAD PREVIOUSLY TELEPHONED HIS GIRLFRIEND AND TOLD HER TO BE OUTSIDE OF HER HOUSE TO WATCH FOR HIM. HE THEN TOOK OFF WITH A STUDENT PILOT AND CIRCLED HER HOUSE AT ABOUT 300 FT IN A STEEP BANK. WITNESSES OBSERVED THE AIRPLANE PITCH DOWN AND CRASH. NO EVIDENCE OF ANY AIRPLANE OR POWERPLANT PREACCIDENT FAILURES WERE FOUND.