ABOUT 6 MIN AFTER TAKEOFF, AFTER LEVELING AT 3500 FT, THE PLT RPRTD HE WAS HAVING A PROBELM THAT HE WAS UNABLE TO FIGURE OUT. A FEW MINUTES LATER, HE REPEATED THE SAME PROBLEM & ELECTED TO DIVERT TO A NEARBY ARPT. WITNESSES RPRTD THE ACFT REVERSED COURSE SVRL TIMES, & AT LEAST ONCE, IT ENTERED A SPIN, BUT RECOVERED. RPRTDLY, IT THEN BEGAN CLIMBING BUT ENTERED A 2ND SPIN & CRASHED IN A RESIDENTIAL AREA, DAMAGING 2 HOUSES. TWO WITNESSES RPRTD THE LEFT ENG HAD EITHER STOPPED OR WAS WINDMILLING BEFORE THE ACFT CRASHED. RADAR DATA SHOWED THE ACFT HAD TURNED LEFT FOR A TOTAL OF 360 DEGS, WITH SVRL ALTITUDE EXCURSIONS, WITHIN A .45 MI RADIUS. NO PREIMPACT PART FAILURE WAS FOUND, BUT THE ACFT WAS EXTENSIVELY DAMAGED BY IMPACT & FIRE. ONE OF THE RGT PROP BLADES WAS BENT APRX 145 DEG OPPOSITE OF THE DIRECTION OF ROTATION, THE OTHER RGT PROP BLADE WAS RELATIVELY STRAIGHT WITH COMPRESSION DEFORMATION. BOTH LEFT PROP BLADES WERE FOUND AT A LOW PITCH SETTING WITH ONE BLADE BENT AFT APRX 60 DEG & THE OTHER BLADE BENT FORWARD ABOUT 15 DEG.