The good news is no one was hurt. The bad news, according to the AP, is that NASA spokeswoman Lisa Malone "says it appears that the methane-powered Morpheus lander is a total loss."
NASA was live streaming the test and the video shows the spacecraft start hovering and then slowly tip over, crash into the ground and erupt into flames. Seconds later, an explosion is heard.
The AP reports:
"The test lander was built mostly with low-cost, off-the-shelf equipment at Johnson Space Center in Houston. It was an attempt by NASA to use cheaper, more readily available and environmentally friendly rocket fuel. NASA was considering it as a potential lander for places like the moon or an asteroid."
Earlier this month, NASA conducted a successful test flight with the spacecraft tethered to a crane. They posted video of it on their website:
Update at 2:54 p.m. ET. $7 Million:
According to a Florida Today piece about Project Morpheus, NASA has spent $7 million over the past 2.5 years on the project.
The paper points out that Morpheus had just arrived at the Kennedy Space Center from Houston in late July.