Witnesses saw the acft climb to an alt of about 500 to 800 ft AGL after taking off from RWY 32. At about that time, they heard a loud noise fm the acft, then they noted that the eng sound had ceased. The acft was observed to maneuver as if the plt was trying to return to the RWY. The plt transmitted a 'mayday' report, stating he had 'lost the engine.' While turning back to the RWY, the left wing & nose of the acft dropped & the plane entered a left dscndg turn. It impacted the gnd in a nr flat attitude while in a high rate of dscnt, then it slid into a tree & burned. An exam of the wreckage revealed 1 prop blade had sepd fm the hub drg flt. A metallurgical exam showed the hub had failed fm fatigue. Drg the previous 87 hrs of opn, the acft had been involved in two occurrences of gear collapse, which resulted in prop strikes with the gnd. According to records, the hub was inspected & found to be in accordance with the requirements of the manufacturer (McCauley) & the FAA. The plt's previous flt time in this make/model of acft was not determined.