PAX IN A PA28R-200; WHO IS A FLT INSTRUCTOR; WAS DEPARTING RWY 22 AT A FIELD WHERE SPECIAL EVENT PLTS WERE ARRIVING AND MAKING FLY-BY'S WHICH BROUGHT THEM HEAD ON TO THIS TFC. A GND OBSERVER CALLED OUT THIS TFC TO THE RPTR CREW BUT THEY CONTINUED THEIR TKOF RESULTING IN AN NMAC.

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WE WERE DEPARTING I69 ARPT AT THE SAME TIME ACFT PARTICIPATING IN A SPECIAL EVENT WERE ARRIVING; AND OVERFLYING THE TXWY W OF RWY 4/22. WHILE TAXIING FOR DEP; OBSERVERS E OF RWY RADIOED AND INQUIRED ABOUT OUR DEP. WE WERE ADVISED OF THE SPECIAL EVENT TFC; AND A RECOMMENDED L TURNOUT FOR A N DEP WAS RECEIVED FROM ONE OF THE OBSERVERS. FOLLOWING OUR RUN-UP; THE PF ANNOUNCED HIS INTENTION TO DEPART; PULLED ONTO RWY 22; AND BEGAN THE TKOF ROLL. THE GND OBSERVER WITH THE RADIO ADVISED OUR ACFT THAT A SPECIAL EVENT PARTICIPANT WAS INBOUND 'HEAD ON' TO OUR DEP PATH. THE PF POINTED OUT THE TFC; THEN R OF OUR DEP PATH AND OVER THE TXWY (AS WE WERE INFORMED WOULD HAPPEN). PF ELECTED TO CONTINUE THE TKOF ROLL; AS THE TFC WAS IN SIGHT AND BELIEVED TO BE NO FACTOR. I ALSO OBSERVED THE INCOMING ACFT AND CONCURRED WITH HIS ASSESSMENT THAT IT WOULD NOT BE A FACTOR. PF DID NOT RELAY THIS INFO TO THE GND OBSERVERS; AND I DID NOT HAVE A PUSH TO TALK SWITCH TO HANDLE THIS TASK FOR HIM. FROM THE VIEWPOINT OF THE GND OBSERVERS; THE ACFT 'NEARLY COLLIDED;' WHEN IN FACT WE HAD THE ARRIVING 'FLY-BY' TFC IN SIGHT AT ALL TIMES; AND NEVER CAME SO CLOSE AS TO CREATE A HAZARD. CONTRIBUTING FACTORS: ARPT SHOULD HAVE BEEN NOTAMED CLOSED TO ALLOW THE MULTIPLE AND UNUSUAL 'FLY-BY'S TO BE PERFORMED. ADDITIONAL FACTOR: SOME UNKNOWN PERSON ACTING AS ATC AT AN UNCTLED AIRFIELD.