STUDENT AND INSTRUCTOR ON PRACTICE ILS DSND BELOW ASSIGNED ALT DUE TO GS FAILURE.

Narrative

THIS WAS AN IFR TRAINING FLT. WE HAD INTERCEPTED THE LOC; AND ATC HAD CLRED US FOR THE APCH WITH INSTRUCTIONS TO MAINTAIN 3000 FT UNTIL ESTABLISHED; WHICH WE DID. I NOTED MENTALLY THAT THE GS FLAG HAD PULLED AND THAT WE HAD NOT; AT THAT TIME; INTERCEPTED THE GS. SOMETHING DIVERTED MY ATTN AND WHEN I NEXT LOOKED AT THE INSTS I OBSERVED THAT THE INST STUDENT PLT HAD THE ACFT IN A NORMAL 500 FPM DSCNT; AND THAT THE GS NEEDLE WAS LEVEL (WHICH I INTERPRETED AS ON GS). I KNEW; HOWEVER; THAT I HAD NOT HEARD THE MARKER SOUND OFF NOR HAD I SEEN THE MARKER LIGHT ILLUMINATE. MY FIRST THOUGHT WAS THAT THE MARKER RECEIVER HAD FAILED (AS THIS HAD HAPPENED TO ME A WK BEFORE IN ANOTHER AIRPLANE). AFTER THE ACFT HAD DSNDED TO 2200 FT MSL (800 FT BELOW WHERE WE SHOULD HAVE BEEN AT THAT POINT); I REALIZED THAT THE GS RECEIVER FLAG WAS SHOWING AND THAT WE HAD NOT YET CROSSED THE OM (WHICH WAS A LOM) AS CONFIRMED BY THE ADF NEEDLE STILL POINTING IN THE SAME DIRECTION WE WERE TRAVELING. I IMMEDIATELY TOLD THE STUDENT TO STOP THE DSCNT; AND NOTIFIED ATC THAT OUR GS HAD FAILED. EVEN THOUGH WE DSNDED 800 FT BELOW THE APPROPRIATE ALT; ATC NEVER DID MENTION OUR ALT EXCURSION. WHAT CONCERNS ME MORE THAN ANYTHING; THOUGH; IS THE FACT THAT A RIDGE IS BTWN THE MIDDLE AND OM WHICH WE SURELY WOULD HAVE HIT HAD I NOT REALIZED THE GS FLAG WAS NOT PULLED.