Wow, that is bad. As a member of the Luscombe owners community I can say that this is going to be a tough blow.
Possibly unrelated but as I was completing the annual on my Champ I had to replace a leaky Curtis drain on the gascolator. This is the same type used on the Luscombes and most old classics of that era, it consists of a metal cup with a gasket at the top and a hoop with a knurled nut at the bottom that secures the whole thing. I've been flying with that gascolator for years but I guess in the process of replacing the drain valve, which was really frozen in the cup, I must have slightly deformed it because after I put it back together and all seemed just fine, as soon as I got the plane out of the hangar fuel began pouring out at the base of the firewall.
When I took it apart I found that the gasket had migrated inward so I repositioned it and put it back together again very carefully but again the gasket slipped out. I eventually found that if I did not overtighten the knurled nut it would hold but another quarter turn and it would leak.
So I dished out the $250 for an STC'd replacement gascolator from Steve's Aircraft which is a very nice full billet aluminum unit that is far, far superior to the old original ones. I am going to make a point of recommending this upgrade to all of the Cub, Champ and Luscombe owners I know. It may not have been the cause of this catastrophe but it's a sketchy setup nonetheless.
Condolences and prayers to those close to the lost ones.