Late to the discussion, but:
There was no computer malfunction that caused this crash, for the simple reason that there is no flight control computer. The C-130 uses hydro-mechanical flight controls: Cables go from the primary flight controls to the hydraulic actuators which move the control surfaces. There are no computers involved and the flight controls do not even need electricity to operate (the rudder control DOES use a signal to change rudder pressure based on flap position, but will operate regardless).
The aircraft climbs out at a speed above the minimum single engine out control speed, and must be able to meet certain performance criteria with one engine out. There have been rumors of two engines failing, however. If there WERE two engines out on the same side, or certain single engine malfunctions involving the propeller, the minimum control speed would be higher, and could be higher than the charted climbout speed in many, if not all, cases. The aircraft may well be unable to maintain altitude if two engines fail (from the -1: "WARNING Two-engine operation above 120,000 pounds gross weight or at high density altitude is marginal"), while having them both on the same side would greatly increase controllability problems.
The fireball is not excessive for the crash - a C-130 can carry up to 60,000 lbs of JP-8.
v/r
Mike