THE CFI & STUDENT PLT WERE ON A TRAINING FLT. WITNESSES HEARD THE ENG SPUTTER, THEN CUT OUT COMPLETELY. ONE WITNESS SAID HE THOUGHT THE PLT WOULD ATTEMPT A LANDING TO THE SOUTH, LENGTHWISE, INTO A PASTURE BORDERED ON ALL SIDES BY TREES APRX 50 FT HIGH. THE ACFT BEGAN A RIGHT TURN WHILE DESCENDING & REMAINED OVER THE TREES OUTSIDE THE PASTURE'S EASTERN BOUNDRY. APRX MIDWAY DOWN THE PASTURE'S LENGTH WHILE STILL OVER THE TREES, THE ACFT (NOW ON A SW OR DOWNWIND HEADING) BEGAN A STEEPER RIGHT BANK & THE RIGHT WING STRUCK A TREE LIMB. THE ACFT THEN CRASHED INTO THE PASTURE CROSSWISE. THE SURFACE WINDS WERE FROM 070 DEGS AT 12 GUSTING 18 KTS. THE FUEL SHUT OFF VALVE WAS FOUND IN THE 'OFF' POSITION, THE THROTTLE WAS FULLY OPEN, THE MAG SW WAS ON 'BOTH' & THE MIXTURE WAS IN THE 'RICH' POSITION. POLICE & FIRE/RESCUE PERSONNEL DENIED TURNING THE VALVE OFF AFTER THE ACCIDENT. BOTH OCCUPANTS RECEIVED HEAD INJURIES & COULD NOT RECALL THE ACCIDENT. NO PREIMPACT PART FAILURE/MALFUNCTION WAS FOUND DRG THE INVESTIGATION.