A witness in another ultralight saw the pilot of the Eagle XL climb to about 800 to 1000 ft AGL after taking off. The witness was approximately 500 ft AGL when he saw the Eagle XL start a steep descent from his 8 to 9 o'clock high position and thought the Eagle XL pilot was descending to meet him. He looked away to scan for other traffic and when he looked back he saw the Eagle XL just before it impacted the ground in a near vertical dive. He noticed that before impact the left wing appeared to be swept back approximately 15 to 20 degrees more than the right wing. Examination of the wreckage revealed that the left front flying wire was found separated at the bowsprit attach point. The pilot had previously failed a flight physical due to his failure to pass two depth perception tests. Reportedly, the pilot had previously made rapid descents and had said he enjoyed doing these maneuvers.