The test bed aircraft (74-2065) was ready for its first test flight on September 18, 1980, just three weeks after the project was initiated. The first fully modified aircraft, AF Serial No. 74-1683, was delivered on October 17 to TAB 1, a disused auxiliary airfield at Eglin Air Force Base, Florida. Between October 19 and October 28, numerous flights were made testing various aspects, including the double-slotted flaps system, which enabled the C-130 to fly at 85 knots on final approach at just an eight-degree glide slope. All aspects worked flawlessly, and a full profile test was scheduled for October 29.
During the test, the Lockheed crew determined that the computer used to command the firing of the rockets during the landing sequence needed further calibration to perform the crucial firing sequence during landing, and elected to manually input commands. The reverse-mounted (forward facing) eight ASROC rockets were situated in pairs on the upper curvature of the fuselage behind the cockpit, and at the mid-point of each side of the fuselage beneath the uppers. Testing had determined that the upper pairs, fired sequentially, could be ignited while still airborne (specifically, at 20 feet), the lower pairs could only be fired after the aircraft was on the ground. The flight engineer, blinded by the firing of the upper deceleration rockets, thought the aircraft was on the runway and fired the lower set early, while the descent-braking rockets did not fire at all. Later unofficial disclaimers alleged to have been made by some members of the Lockheed test crew asserted that the lower rockets fired themselves through an undetermined computer or electrical malfunction, which at the same time failed to fire the descent-braking rockets.
As a result, the aircraft's forward flight vector was reduced to zero, dropping it to the runway and tearing off the starboard wing between the third and fourth engines. During rollout the trailing wing ignited a fire, but crash response teams extinguished the fire within eight seconds of the aircraft stopping, enabling the crew to exit the aircraft without injury. 74-1683 was destroyed but most of its unique systems were salvaged.
74-1686 was nearly completed, but the defeat of Jimmy Carter by Ronald Reagan in the presidential election on November 4, 1980, and an Algerian-negotiated release plan led to the cancellation of this rescue mission plan. The hostages were subsequently released concurrent with Reagan's inauguration in January 1981. The program has been criticized after-the-fact as having been fatally handicapped by inadequate systems and flight testing due to haste caused by the political expediency to effect a rescue before the 1980 presidential elections.