Background
The airplane had been stationary for an extended period following a propeller strike. A ferry permit was issued to allow the airplane to be flown to another airport for repairs.
Flight and Incident
The pilot performed a preflight inspection and engine run-up, noting no anomalies. During initial climb, approximately 300 feet above ground level, the engine lost power. The pilot attempted to return to the departure airport. The airplane struck the ground on the east side of the runway, resulting in substantial damage to the fuselage.
Examination
A Federal Aviation Administration inspector examined the airplane and found the fuel was contaminated with water. Draining the right and left fuel tanks yielded about 1 pint of water from each.
Pilot Statement
In a telephone interview, the pilot recalled that during preflight he sumped the fuel tanks but did not observe any water.