On January 22, 1995, at 1615 mountain standard time (mst), a Stuart/Wagner Mountain Eagle, N2176Z, registered to Jim Stuart and Randy Wagner of Helena, Montana, and piloted by an airline transport rated pilot, was substantially damaged when it went off the departure end of runway 18 (1,400' X 50' snow covered sod) and collided with rough ground at a restricted landing area. The 14 CFR Part 91 flight was not operating on a flight plan. Visual meteorological conditions prevailed at the time of the accident. The pilot and passenger reported no injuries. According to the pilot, the "...aircraft lost normal takeoff power at rotation and I landed straight ahead." During a telephone interview with the pilot, he said that he had flown seven demonstration flights from that airport before the accident flight. He said he began the accident flight's takeoff shortly after refueling. During the takeoff, the pilot said the engine surged and experienced a total loss of power. He said he was unable to stop on the remaining runway and ran off the runway's departure end. The pilot said he had drained fuel before the flight and found no water or foreign debris in the fuel sample. The passenger in the airplane stated the engine sounded "ok" and that it did not surge. He said the airplane's wings banked right and then left twice as the plane neared the takeoff point. He said the plane did the banking motions about 500 feet down the runway from its start point. The passenger said the engine sounded like it was at full power throughout the takeoff run. Pilots standing near the runway witnessed the takeoff that lead to the accident. They reported the airplane lifted off the runway mommentarily, then settled back onto it, banking its wings right and left. They stated the engine sounded normal and was not surging or missing. One witness said the airplane had lifted off from a three-point attitude and settled back down onto the runway. He said the airplane had a steep angle of attack when it was sitting on its tailwheel. The airframe, engine, and propeller were examined by a contract A&P Mechanic. He stated he found both propeller blades tips curled forward, about 6 inches in from the tip. One blade was bowed forward from the hub to the curled tip. He said he found "Minute strands of fiberglass in [the carburetor finger] screen- but not [in its float] bowl." The engine's spark plugs were tan/grey in color. He said there was no evidence of fouling in the plugs. His examination revealed that the right magneto would not produce spark due to internal burn damage to the rotor and distribution block. The oil was clean, according to the mechanic.