The long road to success is littered with failure. Now that the engine woes are sorted, it appears that the high thrust-line and high power of the engine is producing a very strong nose-down tendency out of the launch and, because there's no propwash over the elevators, the resulting dive into the ground is unavoidable.
Several solutions are possible:
1. launch the model on a windy day so that the elevators have some effect out of the launch.
2. use a catapult to launch the model
3. try a take-off from the ground
4. alter the thrust angle of the engine.
Stay tuned... I smell success just around the corner! :)