The pilots failure to correctly identify an in-flight emergency (fluctuating manifold pressure and rpm due to a disconnected spark plug lead / unscrewed ignition lead shroud) and failure to complete the engine shutdown procedure once it was initiated (propeller not feathered). This resulted in a forced landing and subsequent in-flight collision with a tree, dirt bank and canal. Contributing to the accident was the FAA inspectors improper supervision of the pilot, and the improper supervision of the inspector by her supervisor, in his failure to follow written procedures / directives in assigning a non-current inspector to conduct a competency flight.