SMA X WITH ACFT EQUIP PROBLEM ENG HAD TO GAR BECAUSE SMA Y HAD BEEN CLRED TO LAND ON OPPOSITE END OF RWY. SYS ERROR. SITUATION NON FEDERAL TWR PROFICIENCY IN DOUBT.

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WHEN DEPARTING THE RWY ON OUR FOURTH TKOF; AFTER REACHING 400 FT AGL; THE ENG STARTED TO RUN ROUGH. AT THIS TIME STUDENT WAS TURNING XWIND THE ROUGHNESS INCREASED AND I TOOK THE CTLS; WHILE DECLARING AN EMER TO ATC. WE WERE GAINING ADDITIONAL LIFT FROM THE CLOUDS; AND GAINED AN ADDITIONAL 200-250 FT AS I TRIMMED FOR BEST GLIDE. ATC REQUESTED MY INTENTIONS AND I ASKED FOR CLRNC FOR ANY RWY. IMMEDIATELY; BY THIS TIME WE WERE MAKING SMOKE. ATC CLRED ME FOR LNDG ANY RWY; AND I TURNED BACK FOR RWY 4. WHEN CHKING THE AREA I SAW AN AIRPLANE ON FINAL FOR 22 MAKING MY IMMEDIATE ARR ON 4 IMPOSSIBLE. MY ENG RPM WAS CONTINUING TO DETERIORATE BUT I STILL HAD SOME PWR. I PERFORMED A CHK OF MAGNETOS (VERIFYING BOTH ON); FUEL VALVES; THROTTLE; PROP; ETC. THANK GOD FOR THE LIFT PROVIDED BY THE CLOUDS. I MADE IT ABEAM THE ARR END OF 22. SMA Y WAS STILL ON FINAL AND MY CHOICE WAS THE GRASS W OF THE T HANGARS OR 22 IF SMA Y GOT OUT OF MY WAY. TURNING TOWARD 22 OR THE GRASS; I SAW SMA Y TOUCH DOWN. I MADE A STEEP TURN TO THE RWY WITH THE NOSE DOWN. ONCE I HAD THE CENTERLINE; APPLIED FULL FLAPS AND TOUCHED DOWN AS SMA Y LEFT THE RWY. OVER THE RWY THE ENG COUGHED; BACKFIRED AND QUIT THEN BY ITSELF; STARTED TO RUN. I ASSUME THE BACKFIRING RELIEVED THE PRESSURE BUILDING IN #6 CYLINDER. (THE MECH FOUND A STUD HAD BROKEN ON THE ROCKER ASSEMBLY ON #6 EXHAUST VALVE.) ONCE ON THE GND WE TAXIED TO THE HANGAR AND CALLED MAINT. THE TWR TOLD ME HE WOULD CANCEL THE FIRE DEPT. I HAD A CONVERSATION WITH THE ARPT MGR. HE INFORMED ME HE HAD A CONVERSATION WITH THE TWR DURING THE EVENTS. I HAVE SOME RESERVATIONS ABOUT THE WAY THIS SITUATION WAS HANDLED BY ATC. 1) WHEN I WAS GIVEN CLRNC TO LAND ANY RWY; WHY DIDN'T THE CTLR BREAK SMA Y OFF HIS APCH? 2) IF HE DID BREAK SMA Y OFF HIS APCH; WHY DID THE PLT CONTINUE? 3) I BELIEVE A SERIOUS ACCIDENT WOULD HAVE HAPPENED IF I WASN'T GAINING LIFT PROVIDED BY THE CLOUDS. MY ENG HAD QUIT TOTALLY PRIOR TO REACHING THE ARR END OF 22; OR IF MY OPTION OF THE GRASS W OF THE T HANGARS DID NOT EXIST. 4) THIS IS NOT THE FIRST TIME ATC AT THIS FIELD HAS MADE SERIOUS SAFETY BLUNDERS; MOST PLTS AT THIS FIELD COMPLAIN ABOUT ARR CLRNCS; MULTIPLE ACFT CLRED TO LAND AT THE SAME TIME; NOT TO MENTION BEING TURNED INTO EACH OTHER. 5) MY SAFETY AND THE SAFETY OF MY STUDENT WERE JEOPARDIZED BY THE INCOMPETENT HANDLING OF THIS SITUATION. CALLBACK CONVERSATION WITH RPTR REVEALED THE FOLLOWING INFO: RPTR STATED SHE TALKED TO ARPT MGR ABOUT INCIDENT. ARPT MGR SAID THE TWR CTLR WAS A TRAINEE AND WAS VERY BUSY CALLING EMER EQUIP. TRAINEE WAS IN TWR ALONE. RPTR STATED FSDO SAID THERE WAS NOTHING THEY COULD DO BECAUSE IT WAS A NON FEDERAL TWR. RPTR STATED SHE DID NOT CALL TWR MGR BECAUSE THEY DID NOT KNOW WHAT THEY WERE DOING. RPTR FURTHER STATED SHE ADVISES HER STUDENTS TO FLY AS IF THE ARPT IS A NON CTLED ARPT BECAUSE THE TWR DOES NOT KNOW WHAT THEY'RE DOING. THIS ANALYST BELIEVES THE RPTR HAS AN ATTITUDE PROBLEM.