On March 23, 1999, about 1520 hours Pacific standard time a Beech 58, N6BY, made a gear-up landing at Castle airport, Atwater, California. The aircraft sustained substantial damage; however, neither the airline transport licensed flight instructor nor his private pilot under instrument rating instruction was injured. The airplane was being operated as an instructional flight by the owner/student, under 14 CFR Part 91 of Federal Aviation Regulations, when the accident occurred. The flight had originated from Palo Alto, California, about 1420. Visual meteorological conditions prevailed at the time and no flight plan was filed. The instructor reported that he and his student had just completed a full stop landing at Castle. They subsequently took off on runway 31 and remained in the traffic pattern to practice a simulated single engine approach. The instructor simulated a right engine "failure" at 600 feet agl by putting the engine in a zero thrust condition. The student climbed about 200 to 300 feet above pattern altitude and extended his downwind so that he would be in position for a 1.5 mile final. The student lowered 15 degrees of flaps on downwind, but decided to delay lowering the balance of the flaps or the gear until turning final. On final, he lowered the flaps to 30 degrees with both engines near zero thrust. The instructor returned the right "failed" engine about 200 feet agl on final approach. Neither crewmember noticed anything unusual until the aircraft appeared to settle more than expected just prior to touchdown. Before either of them could recover, both propellers struck the runway. After the aircraft slid to a stop, both the instructor and student immediately exited the aircraft. An fixed base operator manager and his employee both reported that the aircraft touched down at the 2,100-foot point and slid to a stop at the 3,000-foot marker. The instructor and student both returned to the aircraft after an interval. Upon their return, they verified that all circuit breakers were closed, the flap handle was in the "30-degree" position, and the gear handle was "down." They also noted that the main gear doors were resting on the runway; however, the nose gear doors were closed. Neither recalled hearing the gear warning horn at any time in the landing sequence. The instructor reported that his student had used checklists throughout the single engine approach, and that he had monitored the student's progress. Both had a recollection that the gear handle had been lowered and that three green lights were visible, but neither felt he could say that with complete certainty. The instructor also reported that, on a previous flight, there was an instance in which the gear would not retract on downwind. After cycling the gear handle several times, they were still unable to retract the gear. After landing, on that occasion, their mechanic was unable to identify a problem. A Federal Aviation Administration airworthiness inspector witnessed a functional check of the aircraft after the accident. He reported that the damaged flaps were removed prior to the initiation of the check. He noted that the inboard main wheel well gear doors had damage on their outboard edges consistent with being in transit at the time of ground contact. When aircraft electrical system was powered, the flap actuator moved an additional 0.25-inch, stopping in a position that equated with "full down" flaps. The flap control handle was found in the "full down" flap position. According to the Pilot Operating Handbook for the airplane, the gear warning horn is actuated when proximity switches sense the flaps in the full down position and one throttle is retarded to a near idle position. The landing gear warning horn system was not tested. The green gear safe lights functioned when the gear was lowered. The gear was cycled through "full up" and "full down" several times, both electrically and manually, without difficulty.