At 2249 Eastern time, the airplane collided with a tree and the ground during a forced landing. Visual conditions prevailed. The flight instructor and private pilot located in the left front seat were killed. The rear seat passenger received serious injuries. The airplane sustained substantial damage. At 2243, after cancelling IFR, the pilot changed his destination to a nearby airport. At 2244, the pilot declared an emergency but did not state what the emergency was. Two witnesses observed the airplane flying towards their home at tree-top level. The engine was whistling like a fan. The airplane made a steep right turn over a race track located near the house, then struck the top of a tree and descended nose down over a logging truck and collided with a ditch/culvert. The airplane bounced, went through a barbed wire fence, spun around and came to rest facing back toward the trailer and was adjacent to the road. The right-wing fuel cap was intact with a tight seal. The fuel tank was not ruptured and no browning of vegetation was present. One quart of fuel was drained from the right main fuel tank. The left-wing fuel cap also was intact with a tight seal. The fuel tank was not ruptured and no browning of vegetation was present. Two and one half gallons of fuel was drained from the left main fuel tank.