BEFORE TAKEOFF, THE PLT OBTAINED WX FOR ASHVILLE & HICKORY, NC & FOR THE TRI-CITY ARPT, ALL OF WHICH WERE 30 TO 54 MI FROM BANNER ELK, NC. AT THAT TIME, HE TOLD THE BRIEFER THAT THERE WERE CLOUDS AT BANNER ELK, BUT HE THOUGHT HE COULD GET OUT ALL RIGHT. THE ACFT DEPARTED TO THE NORTHWEST, BUT CRASHED A SHORT TIME LATER, ABOUT 1/2 MI WEST FROM THE DEPARTURE END OF THE RWY. IMPACT OCCURRED ON DOWNHILL TERRAIN WHILE IN A STEEP DIVE ON A HEADING OF 160 DEG. ELEVATION OF THE CRASH SITE WAS ESTIMATED TO BE 3833 FT. SOME WITNESSES STATED THAT THE ENG SURGED 2 OR 3 TIMES, THEN SPEEDED UP & WAS RUNNING AT IMPACT. ANOTHER WITNESS, A STUDENT PLT, STATED THAT THE ENG SOUNDED NORMAL THRU-OUT THE FLT. ALL WITNESSES AGREED THAT THE ACFT WAS IN THE CLOUDS PRIOR TO THE CRASH. ACCORDING TO AN NTSB WX STUDY, THE CLOUD BASES WOULD HAVE BEEN AT ABOUT THE 4000 FT LEVEL. WITNESSES STATED THAT AN OVERCAST WAS APRX 'HALFWAY DOWN THE MOUNTAIN,' OBSCURING THE PEAKS. NO PREIMPACT PART FAILURE/MALFUNCTION WAS FOUND. STUDENT PLT NOT ENDORSED FOR X-COUNTRY.