Pretty sure a few early press report had quotes along the lines of "did not emerge from low cloud, so the preceding turned to search for it" which most likely sums up what happened. While engine failure is still a possibility or other mechanical failure, the early comments all drive at they were dancing around low cloud. Low cloud, flat light, white dead ghost gums, all adds up to a nasty suprise that even if they were visual operating at low level would carry extreme risk. If they were IFR they needed to be another 1500-2000 ft higher to be anywhere near a LSA. The vid from the US where the Bonanza hit a tree in IMC while scudding is testament to how little warning you have, they were lucky to survive, it really should be available for pilots to watch repeatedly as to why you don't go into even the smallest whisp of cloud at low level.