The non helicopter rated pilot was using an unapproved takeoff and landing area between hangers on the airport. Numerous maintenance and certification irregularities were found. The gyrocopter had not had an annually required condition inspection since 1986. Numerous ground witnesses reported that after the pilot completed the modifications, he made one aborted attempt to takeoff. The pilot was next seen to taxi the gyrocopter back to his hangar where he made some minor adjustments to the rotor system. The pilot then taxied the aircraft back to the original takeoff spot, spun up the rotor system and initiated another takeoff. The witnesses saw the machine lift off in a steeper than normal nose high attitude, then the rotor blades began to wave erratically 'like spaghetti.' The gyrocopter hit the ground on its wheels and rolled into a pickup truck. The gyrocopter was examined by an FAA airworthiness inspector familiar with the machines. He reported that he found no identifiable preimpact malfunctions or failures.