Italian media spoke about an engine failure based on testimonies by people on the ground. I think that it's the usual emotional reaction to the shock of watching an air crash: "ball of fire", "trail of fire" etc. Looking at the data available on Flightradar24, it's clear that the engine was running (positive rate of climb, even if very unstable) and that the pilot didn't try to land again in LIML (he passed the threshold of runway 36 without descending). My guess: crew incapacitation; or incorrect air data due to failure of static and/or dynamic ports.