On August 24, 1994, at 1441 eastern daylight time, an Advanced Aircraft Company WACO 10 (GXE), NC5852, lost partial engine power during takeoff climb from the Skyhaven Airport in Rochester, New Hampshire. The airplane sustained substantial damage during the subsequent collision with terrain. The pilot and the pilot rated passenger were seriously injured. Visual meteorological conditions prevailed at the time and location of the accident. The local personal flight was conducted under 14 CFR Part 91. The pilot rated passenger stated he was the owner of the airplane and was seated in the aft seat. He stated he conducted the flying duties throughout the flight. He said the accident flight was the first flight since the airplane received a major restoration. He said that during the takeoff climb, the engine did not produce enough power to meet the climb performance criteria needed to clear obstacles at the end of the runway. He stated he turned the airplane to the left to avoid trees at the end of the runway. He stated that during the turn the airplane was inadvertently stalled and it collided with the trees. The pilot in command of the airplane stated that he was seated in the front seat and was acting pilot in command due to his recent experience in tailwheel airplanes. He stated the pilot rated passenger had not flown any airplane for about two years. The pilot in command stated that the preflight run-up of the engine was accomplished and no abnormalities were noticed. He stated takeoff was initiated at an engine revolutions per minute (RPM) of 1,600. He stated that about 3,000 feet down the 4,001-foot-long runway and about 300 to 400 feet above the runway, the engine lost 200 revolutions per minute. He stated that he and the pilot-rated passenger communicated by hand signals and decided to turn around and land the airplane on the runway. He stated that during the turn the airplane collided with trees. Examination of the accident site revealed the airplane collided with trees about 1,500 feet past the end of the departed runway. Post accident examination of the airframe and engine did not reveal any anomalies. The pilot/owner of the airplane stated that when he purchased the airplane it had a Sensenich Propeller Assembly and the theoretical blade pitch angle was 69 inches (96T69). He stated that with these propeller blades, the engine RPM's during takeoff were about 1700. The pilot/owner stated that he bought a new Falcon propeller assembly and asked for a theoretical blade pitch angle of 70 inches. He said prior to the accident flight he installed the propeller assembly, model number 93-96-60. He said that the published static RPM of 1580 was reached but during takeoff the maximum RPM was 1625. He stated that he thought that the airplane's climb performance might have been altered by the new propeller assembly.