On February 01, 2003, about 0800 eastern standard time, a Beech A36, N5677X, piloted by a certified flight instructor (CFI) and dual student, sustained substantial damage during a recovery from an unusual attitude after a loss of control during instrument flight. The non-instrument rated dual student held a private pilot certificate with a single engine land rating. The 14 CFR Part 91 training flight was operated in instrument meteorological conditions (IMC) with an instrument flight plan. No injuries were reported. The flight originated from the Gerald R. Ford International Airport (GRR), Grand Rapids, Michigan, about 10 minutes prior to the loss of control. The destination has not been determined. The weather reporting station located at the departure airport recorded the ceiling and visibility as overcast ceiling at 700 feet above ground level, and 7 statute miles respectively. The report was taken about 4 minutes prior to the accident. The CFI reported that prior to departure checks of the engine and flight instruments were normal. He stated that the takeoff was uneventful. Shortly after takeoff the airplane entered IMC. The CFI said he noticed that the airplane was in a 30 degree bank and he applied right aileron to correct. He said that a subsequent scan of the turn coordinator showed wings level. He said that another scan of the attitude indicator showed a bank angle in excess of 60 degrees. The CFI stated that he assumed control of the airplane and determined that the gyroscopic instruments were not usable. According to the CFI, the airplane exited IMC in an unusual, high speed, nose down, left bank attitude and the he used right aileron and up elevator to recover. The CFI regained control below the overcast and returned to the departure airport. The airplane was substantially damaged due to the pull up during recovery. A postaccident examination of the airplane was conducted. The wings, horizontal stabilizer skins were wrinkled. Further examination revealed that the wing and horizontal stabilizer spars were damaged. During the examination, the turn coordinator circuit breaker was found in the open position. A run up and taxi test confirmed that the primary and backup instrument pressure systems were operational. The pressure gyroscopic instruments functioned without noticeable defect during the test. Additionally, the turn coordinator circuit breaker was reset and no noticeable defects in operation were found during the test. Subsequent to the taxi testing, the artificial horizon indicator (AHI) was removed for further examination. Bench testing of the AHI was performed by a certified repair station under the supervision of a Federal Aviation Administration official. The testing of the AHI revealed that the unit was in an airworthy condition.