On December 25, 1998, about 1845 Pacific standard time, a Cessna 177 Cardinal, N2355Y, registered to and operated by the pilot as a 14 CFR Part 91 pleasure flight, was substantially damaged after colliding with tree tops shortly after departure from the Bellingham Airport (BLI), Bellingham Washington. Night visual meteorological conditions prevailed and no flight plan was filed. The private pilot and his passenger were uninjured. There was no fire, and no report of an ELT actuating. The flight originated from the Bellingham Airport approximately 10 minutes prior to the accident. The pilot stated that shortly after take off, during the ascent, he encountered instrument meteorological conditions at approximately 500 feet above ground level and initiated a turn back to the airport. The pilot stated that "During the turn, I apparently overreacted and increased the bank angle to the extent that it began losing altitude. My instrument scan was poor and I realize now that I was spending too much time looking outside for ground reference." The pilot leveled the wings. However, the airplane continued to descend and collided with tree tops. The pilot was able to continue to the airport and land without further incident. The pilot also stated he did not receive a formal weather briefing from a flight service station and relied solely on the automated weather observing system report at the Bellingham airport. At 1856, the Bellingham automated weather observing system was reporting wind from 350 degrees at eight knots. Visibility was four miles with light rain. The sky condition was reported as a few clouds at 800 feet and overcast at 1,400 feet.