According to the pilot, after takeoff during the climb at approximately 150 feet above ground level, the engine in the unregistered, two seat airplane lost power and the airplane's handling became "mushy." His passenger began to panic, and he found it hard to concentrate and figure out what was happening. The airplane began to lose altitude and he began maneuvering to find a field he could land in. He then noticed that there was a power line in front of him. He was able to clear the power line, but the airplane struck the top of a tree and was substantially damaged. The pilot advised that while maneuvering to land, that when he turned the airplane slightly to the right, the airplane "wanted to fly," and if lowered the nose of the airplane to maintain airspeed, the power seemed to increase slightly. Examination of the wreckage revealed that even though the fuel tank was 1/2 full, the fuel shutoff valve was in the "OFF" (closed) position. The horizontally mounted fuel filter which was located downstream of the closed shutoff valve was only 1/3 full and did not have enough fuel to reach the inlet or outlet ports on the filter. The fuel line to the carburetor was devoid of fuel, and the carburetor float bowl contained less than a teaspoon.