On January 3, 1999, at 1627 hours Pacific standard time, a Cessna 140, N3585V, nosed over and came to rest inverted in a marsh following a touch-and-go landing attempt at the Santa Barbara, California, airport. The airplane sustained substantial damage, and the commercial pilot/owner and his passenger received minor injuries. The flight was being flown under CFR Part 91 when the accident occurred. The personal flight originated in Santa Paula, California, at 1550, and a flight plan was not filed for the flight. Visual meteorological conditions prevailed at the time of the accident. The pilot reported that he was cleared for touch-and-go's on runway 15L. He stated he had just lifted off and was proceeding to climb on the runway heading when the engine power "abruptly reduced to no power" at 150 feet agl. He said he executed a gradual turn to the right, and lowered the nose to maintain forward airspeed. He said that the engine was faltering and producing partial power, and then no power. He said the airplane struck the ground with a slight nose low attitude. The airplane was removed from the site and relocated to a nearby aircraft wreckage yard. At the request of the Safety Board, the wreckage was examined under the supervision of a Van Nuys, California Flight Standards District Office aviation inspector and a Textron Lycoming engine representative. According to the Textron Lycoming engine representative, the engine did not display any evidence of premishap catastrophic mechanical malfunction or fire. The bottom spark plugs were removed and examined by the engine representative. He noted that the spark plug electrodes were undamaged from any foreign object ingestion. The crankshaft was rotated by hand utilizing the propeller, and was free and easy to rotate in both directions. Thumb compression was observed in proper order on all four cylinders. The right magneto was found securely clamped. The magneto to engine timing was observed at 17 degrees before top dead center (BTDC) of cylinder number one. The Lycoming engine data plate specifies the engine to magneto timing be at 25 degrees BTDC. The left magneto, S4LN-21, 10-51360-37, s/n 0010469 was found securely clamped. The impulse coupling was heard clicking during rotation of the crankshaft. During the magneto to engine timing check, the timing light would not illuminate on the syncrophaser during rotation of the crankshaft. The magneto to engine timing could not be ascertained. The magneto was removed for further examination. The drive was observed to be intact and properly saftied. The contact assembly (points) was undamaged and was observed to operate normally during hand rotation of the drive. Further examination of the magneto coil revealed that the primary circuit was internally shorted. A complete copy of the Textron Lycoming report is appended to this report. Review of the maintenance records disclosed that the last annual inspection was accomplished on May 5, 1998, about 40 hours prior to the accident. No entries were found detailing maintenance on the magnetos after the annual. The wreckage was released to the registered owner at the conclusion of the engine examination on March 1, 1999.