Vraciu - following Occam's razor approach, it would be easiest to surmise that they lost an engine and following Busher's point if you can't feather the engine because of a failure, you're now in a negative climb rate.
Then it's just a math exercise. What's going against them?
1. The B-17 engines are as aerodynamic as a shoebox.
2. The B-17 airplane itself an aerodynamic model from the late 1930s
3. The aircraft was at 500' and Altitude = Energy
4. Based on Busher's comment on the C-130, the B-17 had just 500' of energy to turn around, and re-line-up for final.
Unfortunately, the math didn't add up to a successful probable landing.

It does beg the question... these old birds... is it worth it to keep them flying like this knowing how vulnerable they are when things go wrong? Old design = little room for issues?