A B737-300 ACFT INSPECTOR DESCRIBES THE EVENTS LEADING TO THE #1 AND #2 ENG CORE COWLS BEING DAMAGED BY THE LEADING EDGE SLATS AND INBOARD FLAPS. FLAP HANDLE WAS IN THE FULL-UP POSITION.

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PREPARING TO PERFORM SPECIAL INSPECTION STEP 4 SAID TO PRESSURIZE HYD SYS A AND B. FLAPS WERE PREVIOUSLY EXTENDED ELECTRICALLY. FLAP HANDLE STILL IN THE FULL 'UP' POS. FLAPS WERE FULLY RETRACTED. #1 AND #2 ENG CORE COWLS WERE OPEN FOR OTHER MAINT (AND DEACTIVATED). I WENT TO EVERY PERSON IN THE HANGAR AND ASKED FOR CLRNC FOR HYDS AND TO RAISE FLAPS. I ASKED ABOUT CLRNC BECAUSE I KNOW FLAPS WOULD RETRACT SINCE THE HANDLE WAS IN THE FULL 'UP' POS. XXX WAS IN THE #1 ENG CORE COWL WORKING ON THE BLEED VALVE. I ASKED HIM TO STEP OUT JUST IN CASE SOMETHING WENT ASTRAY. DUE TO THE HANDLE BEING IN THE FULL 'UP' POS; I THOUGHT THE FLAPS WOULD NOT EXTEND. I ALSO WENT TO THE PERSONNEL IN THE OFFICE TO ASK FOR CLRNC. THEN I SPECIFICALLY FOUND BOTH GUYS ASSIGNED TO THE WINGS TO SEE IF THEY WERE COMPLETE AND THEY SAID YES; OK TO RETRACT FLAPS. I WALKED AROUND THE ACFT 1 MORE QUICK TIME TO ANNOUNCE HYDS AGAIN. THEN I PROCEEDED TO THE COCKPIT; INSTALLED BOTH HYD CTL BREAKERS AND PUMP BREAKERS FOR BOTH A AND B SYS; VERIFIED THE FLAP HANDLE POS AGAIN; TURNED ON ANTI-COLLISION BEACON. I HONKED THE GND CALL HORN; LOOKED AT THE FLAP HANDLE POS (FULL 'UP' POS) CYCLED THE HYD SWITCH BRIEFLY; LOOKED FOR AN INCREASE IN HYD PRESSURE (THEY ROSE BUT NOT TO FULL PRESSURE); CYCLED THEM AGAIN; SAME THING. ASSUMED THAT THE PRESSURE WAS NOT RISING TO THE FULL PRESSURE DUE TO FLAPS STARTING TO RISE. REAPPLIED THE SWITCHES AT WHICH TIME PRESSURE STABILIZED AND WHO WAS AT THE NOSE OF THE ACFT; INFORMED ME THAT FLAPS WERE STARTING TO EXTEND. I QUICKLY TURNED OFF HYDS AND WENT OUTSIDE TO LOOK. I SAW THAT THE FLAPS MADE CONTACT WITH THE CORE COWLS THEN I WENT TO GET THE ON-SHIFT SUPVR.