As a friend of the passengers and little knowledge of piloting, I do know that the plane was recently equipped with new auto pilot equipment. Could this have caused him to loose power or did he panic and become disoriented. I have been told by other pilots that he may have been disoriented and likey could've made some adjustsments to safety.
My condolences to you during this time of great loss.
Realize that it is very difficult for even experienced pilots to speculate on the actual cause of the crash, given the many number of variables that go into this. Yes, from the communications it seems that the pilot lost spatial awareness (what is up, what is down, and how fast the aircraft was traveling) and then accidentally got into either a spin or a death spiral.
However, there are other possible causes. For example, carbon monoxide poisoning can cause disorientation and confusion in both pilots and passengers, leading to a loss of aircraft control. Most small aircraft have duct work that purposely passes over the muffler, which is how the cabin is heated. It is possible for CO to pass into the heating system and into the cabin, affecting the occupants. I am not at all implying this was the case here but just pointing out another scenario. A mandatory autopsy on the pilot will expose this.
Another issue known to cause aircraft to suddenly lose control is icing (where super-cooled water droplets hit the below-freezing airframe and props, then immediately turn to ice. As the ice accumulates, all kinds of aerodynamic impediments occur). Again, I do not know the meteorological conditions that day, but all it takes for icing to occur are temperatures below freezing at the altitude the aircraft is or was, and visible moisture either in the form of a cloud or freezing rain - the former being much more common. Icing can be surmised by investigators but not always proved, since by the time the aircraft is discovered fire or warmer temperatures have melted all ice from the airframe.
Most Barons (the type of aircraft involved) are equipped with anti-ice boots (inflatable, rubber balloon-type devices on the leading edges that pop the ice off) but there are some that are not equipped. Also, running the boots is a manual task that can be prone to error or omission. Again, I am just pointing this out generally and none of this should be taken to imply anything related to this accident.
And finally, there have been rare cases where autopilots have malfunctioned and, not being caught in time by the pilot, have put the aircraft into an unusual attitude that led to a crash.
The NTSB maintains a public website where all non-military accident reports are available to read. I don't see a preliminary report posted there yet for this crash but you can watch it at this link for the day of the accident: http://www.ntsb.gov/ntsb/AccList.asp?month=11&year=2008
Note that it will most likely take up to a year or so for the report to move from a status of preliminary and factual to final or probable cause. So you will need to check back every few months for a year or so to see if the report has been updated. Eventually the NTSB will post a probable cause of what their investigation concluded may have been the cause. But also be aware that often times the report concludes with a "... for unknown reasons," which means that there will forever be a question as to what really happened.
From reading the various news articles about your friends, it does seem the community has suffered a great loss. My thoughts are with you and the family of the victims as you and they grieve.
edit: Converted link to working hyperlink.