On August 27, 1994, at 1452 eastern daylight time, a homebuilt Rans S-7, N44AL, lost partial engine power during initial climb from runway 22 at the Palmer Airport, Palmer, Massachusetts. While maneuvering back to the departed runway, the engine lost total power. The airplane stalled and descended to the ground. The certificated flight instructor, the sole occupant, received minor injuries. The airplane was substantially damaged. Visual meteorological conditions prevailed at the time and location of the accident. The personal local flight was operated under 14 CFR Part 91. According to the pilot, the purpose of the flight was to familiarize himself with the airplane so he could instruct the owner how to fly it. He stated that the owner of the airplane had just purchased it two days prior to the accident. The pilot stated that shortly after takeoff, about 50 to 75 feet above the ground, the airplane's engine began to loose power. He stated he decided to maneuver back to the departed runway and "...began a slow 180-degree turn to the right." The pilot stated that during the 180-degree turn the "...engine stopped completely. The nose dropped steeply and the pilot began to pull the nose back up when a buffeting was felt and the nose returned to [a] steeper angle. Aircraft hit ground est. 35 degrees down and 45 degrees off of the runway heading." Post accident examination of the engine did not reveal any anomalies. The engine was started and continued to run without any anomalies noted. (See attached FAA Inspector's Report). Fuel was found in the fuel tanks and no anomalies were found throughout the fuel system.