At about 1745 Pacific time, a Beech C23 lost engine power and crashed near Oak Shores, killing the flight instructor, student pilot and one passenger. An additional passenger was seriously injured. The surviving passenger said the pilots reported over the intercom that there was an engine problem and that they were headed for a gravel landing strip a few miles away. The airplane cleared a ridge top, but collided with trees about a quarter-mile from the strip. An Alert Notice and an ELT signal led rescuers to the crash site. Initial inspection showed an exhaust valve apparently broke off.