According to multiple statements, the seller of the single-seat, amateur-built airplane first performed a preflight inspection, along with the buyer and an evaluation pilot, then flew a demonstration flight around the traffic pattern at 300 to 400 feet above the ground to a full stop landing. Winds were straight down the runway at 10 knots, but gusty. The evaluation pilot, who had not previously flown the model, subsequently performed ground checks and taxi practice before taking off and climbing the airplane to about 400 feet. He then turned the airplane onto the crosswind leg, and reduced power before turning it onto the downwind leg. After several seconds on the downwind leg, the airplane began to descend. The pilot added full power to arrest the descent; however, the airplane continued descending at full power, dropping almost vertically before impacting the ground in a level attitude and substantially damaging the wings and fuselage. Terrain elevation about 3 nautical miles upwind of the runway was approximately 150 feet higher. No preexisting mechanical anomalies were noted with the airplane, and all of the statements indicated that the engine was producing full power during the airplane's descent.