On July 15, 1995, at 1040 eastern daylight time, a Piper PA-28- 140, N9908W, collided with trees during a forced landing into a wooded area adjacent to Statesville Municipal Airport, in Statesville, North Carolina. The personal flight operated under the provisions of 14 CFR Part 91 with no flight plan filed. Visual weather conditions prevailed at the time of the accident. The aircraft sustained substantial damage; the pilot and the front seat passenger were seriously injured. The two rear seated passengers were not injured. According to the pilot, he stopped in Statesville to refuel while enroute to Parkersburg, West Virginia. After having both tanks topped off, the aircraft taxied to runway 28, and a run up was performed. There was no indication of an engine problem. The pilot stated that they departed runway 28, and that everything seemed normal during the takeoff roll and rotation. At approximately 300 feet above ground level, the pilot realized that the airplane's climbing performance was not what it should have been. The pilot put in 10 degrees of flaps, but the engine RPMs were dropping. The pilot added another "notch" of flaps, 25 degrees, before the engine RPMs fell to zero, and the engine quit. The aircraft began descending into a wooded area, and collided with trees. Upon impact, the pilot immediately turned off the master switch and helped the passengers out of the aircraft. A post crash examination of the engine, performed by the Federal Aviation Administration, revealed that the number four cylinder was cracked between the intake and exhaust valve. The maintenance records indicated that the last maintenance performed on the aircraft was an annual inspection done six months prior to the accident. The engine had a total of 203 hours since the annual inspection.