THE PILOT REPORTED THAT HE WAS WAITING TO DEPART THE AIRSTRIP FOR A BRIEF LOCAL FLIGHT. HE STATED THAT HE WAS HOLDING IN RESPONSE TO SIGNALS FROM A GROUND FLAGMAN WHO WAS POSITIONED TO 'SEE AIRCRAFT AT THE INTERSECTION OF THE TWO RUNWAYS AND SIGNAL THE DEPARTING PILOT WHEN THE RUNWAY IS CLEAR FOR HIS TAKEOFF.' USE OF THE GROUND FLAGMAN WAS DESCRIBED AS STANDARD PROCEDURE AT THE UNCONTROLLED GRASS STRIP BECAUSE OF A CREST IN THE RUNWAY WHICH RESTRICTED VISIBILITY. THE PILOT STATED THAT HE SAW TWO AIRCRAFT LAND ON THE INTERSECTING RUNWAY, BUT LOST SIGHT OF ONE OF THE AIRCRAFT AS IT TAXIED. THE GROUND FLAGMAN SIGNALLED THE RYAN PILOT TO TAKEOFF; HE BEGAN HIS TAKEOFF ROLL, AND COLLIDED WITH THE TAXIING AIRCRAFT AT A POINT APPROXIMATELY 100 FEET FROM THE INTERSECTION OF THE RUNWAYS. NEITHER PILOT SAW THE OTHER AIRCRAFT UNTIL AFTER THE COLLISION.