On my way east around the world in the Baron, I decided to stop in Jerusalem. Once there I decided I'd go check out the Dead Sea for several reasons. One of them being, I wondered if FS took into account that it is 1200 ft below sea level and the plane should fly slower without stalling due to the air being more dense than sea level. Another reason was I wanted to see how the altimeter would read. Well, I never got that far. On arrival to I.Bar-Yehuda (LLMZ) airport ( - 1263 ft ), I was descending through 1000 ft (altimeter set to 29.92 inHg per ATIS) at 85 kts IAS, no flaps yet, when suddenly the plane started spinning wildly causing black outs & red outs. I managed to recover, circled and came in again. Same thing happened only this time on top of uncontrolled rolling, my airspeed indicator went red line, the stall warning came on & flap damage occured. My question is 1) Is this a glitch in FS that you can't fly below sea level ( although the problems started at 1000 ft MSL ) and 2) How in real life would an analog altimeter read at 1200 ft below sea level ?