THE ACFT ENG HAD JUST BEEN TOP OVERHAULED AND A STOL KIT WAS ADDED. THE MECHANIC REPORTEDLY TOLD THE PLT TO BE 'EASY' ON THE ENG AND FLY THE ACFT 45-60 MINS NEAR THE TRAFFIC PATTERN SO IT COULD BE CHECKED FOR OIL LEAKS. THE PLT REPORTEDLYIGNORED THESE INSTRUCTIONS, LEFT THE TRAFFIC PATTERN AND WAS SEEN PERFORMING ABRUPT CLIMBING AND DESCENDING MANEUVERS. A WITNESS REPORTED SEEING THE ACFT SEVERAL MILES FROM THE ARPT TRAILING THIN WHITE SMOKE SHORTLY BEFORE THE ENG STOPPED.THE ACFT THEN MADE A STEEP LEFT TURN AND 'LOST ALTITUDE QUICKLY' IMPACTING TREES. ON SCENE INVESTIGATION REVEALED THE LANDING GEAR AND FLAPS WERE IN THE FULL EXTENDED POSITION. A NEGLIGABLE AMT OF OIL WAS IN THE ENG AND NO EVIDENCE OF AN OIL LEAK WAS FOUND. ENG TEARDOWN REVEALED EVIDENCE OF OIL STARVATION. TWO HOLES WERE FOUND WORN IN THE OIL PRESSURE LINETO THE TURBOCHARGER, HOWEVER, BECAUSE THE INTERNAL TEFLON LINER WAS TRANSFORMED TO ASHES BY INTENSE POST CRASH FIRE IT COULD NOT BE DETERMINED IF THE HOLES WERE WORN THROUGH THE INTERNAL LINER.