On November 6, 2003, approximately 1515 Pacific standard time, a homebuilt Schmitt (Rotorway) Exec 162F rotorcraft, N6463S, owned/operated by a non-rotorcraft rated commercial pilot (student) crashed during a loss of control on liftoff at the Prosser airport, Prosser, Washington. The rotorcraft, which was being flown by the student who was accompanied by a rotorcraft flight instructor, sustained substantial damage. Neither pilot was injured. Visual meteorological conditions prevailed and no flight plan had been filed. The flight, which was instructional, was operated under 14CFR91, and originated from a site approximately three nautical miles north-northwest of the Prosser airport. The flight instructor reported that after demonstrating a takeoff from a slope, the owner (student pilot) was given control so that he could practice the same maneuver. The first liftoff did not feel right to the instructor and he had the student set the down-slope skid back on the deck and retry the maneuver. The instructor stated that the second attempt was initially more successful but as the rotorcraft reached a level attitude the student failed to neutralize cyclic before attempting to liftoff. The student then suddenly applied collective and the rotorcraft began to roll left, rapidly lifting off and entering an immediate left rotation about five feet above ground. The instructor took control of the rotorcraft and attempted to regain directional control. He did not reduce throttle as the rotorcraft was over a ditch, which he did not want to land in. Without a throttle reduction the rotorcraft continued to rotate through four revolutions before RPM had decayed to an extent that sustained flight was no longer possible. The rotorcraft then touched down clear of the ditch while still rotating and immediately rolled onto its left side.