The pilot stated that he conducted a preflight inspection and a ground run up prior to the flight. There were no discrepancies noted then, with the takeoff, and initial climb. When the airplane reached approximately 65 feet above the ground, just over the asphalt end section of the runway, he leveled off the climb and raised the flaps. Suddenly, the engine, "quit", had a loss of power. The pilot lowered the nose of the airplane and attempted to level off before landing but hit the ground hard, collapsing the main gears, which resulted in substantial damage to the fuselage structure. He and the passenger exited the airplane unharmed. Later the pilot realized and confirmed that the friction lock on the engine throttle was not engage correctly resulting in the throttle to roll back to the idle position.