On July 2, 2001, at about 0917 eastern daylight time, a Cessna 188B, N21894, registered to Crakes Aviation Inc., operated by American Outdoor Aerial as a 14 CFR Part 91 banner tow flight crashed at the Leesburg Regional Airport (LEE), Leesburg, Florida. Visual meteorological conditions prevailed and no flight plan was filed. The airplane sustained substantial damage, and the airline transport rated pilot sustained serious injuries. The flight originated from LEE about 2 hours 10 minutes before the accident. The pilot stated he made a left downwind for the sod area adjacent to runway 13 at LEE. He descended down to about 200 feet, 75 to 80 knots, with the banner about 30 feet over the drop area. He applied full power and pulled the release handle. The airplane pitched up violently, he pushed the nose forward with no response and the airplane stalled to the left. Witnesses stated they observed the airplane with a banner in tow over the sod area adjacent to runway 13. The airplane was estimated at about 100 to 350 feet with the banner about 10 to 15 feet off the ground. The airplane went past the drop off point with the banner in tow. The nose was observed to pitch up, the left wing dropped, and the nose pitched down as if the airplane was in a stall and collided with the terrain. Examination of the airplane by the FAA and Bilton Aircraft Management Inc., revealed that the grappling hook cable wrapped around the horizontal stabilizer, starting from the release hook over the top of the right horizontal stabilizer and under the aircraft which allowed the banner pickup. However when the banner was released, the cable went forward and the cable ends jammed the elevator. (For additional information see FAA inspector statement and Bilton Aircraft Management Inc., statement, attachments to this report.)