Nigel,
Well said. I think if I was still instructing, I would be inlcined to get students to practice forced landings for reasons other than the donk stopping. The height at which a flight should result in a forced landing (due low cloud) is a point for discussion, and would depend on a whole raft of factors (terrain, obstructions, aircraft type, laws, pilot experience to name a few) and therefore be determined on a case by case basis. I think however it would be difficult to justify continued flight where the 500' rule (and indeed the rest of the fifth rule) cannot be observed due to a lowering cloud base and if that were the case, it would be time to start selecting a field.