On August 10, 1995, at 1709 central daylight time, a Piper PA-28R, CGQGZ, was destroyed during a forced landing due to loss of engine power near Fremont, Nebraska. The private pilot and two passengers received serious injuries. The 14 CFR Part 91 flight departed Fremont, Nebraska, en route to Fargo, North Dakota. Visual meteorological conditions prevailed and an instrument flight plan was filed. The pilot reported that he had arrived at Fremont Municipal Airport, Fremont, Nebraska, from Fargo, North Dakota, at 0800 central daylight time on the day of the accident. The airplane was refueled shortly after landing with twenty gallons of fuel, ten gallons in each side. At about 1630 he returned to the airplane and conducted a preflight and filed an instrument flight plan to return to Fargo, North Dakota. He reported that no water was observed in the fuel and the preflight was normal. He back-taxied onto runway 13 and conducted an engine runnup and control check. He set one notch of flaps for takeoff and applied takeoff power of 2500 rpm and 40 inches of manifold pressure. He reported that the acceleration and liftoff were normal. He turned left and climbed to about 400 to 500 feet above ground level. He did not complete the turn because he noticed a loss of power while in the climb attitude.(In another statement he reported that he thought he was less than 200 feet above ground level when he felt the loss of power) He reported that he noticed a "sponginess" in the elevator and lowered the nose to avoid a stall. He recognized he was in a verticle descent and he started trying to find a suitable area to make a forced landing. He reported that the interstate highway (Highway 77) was congested with traffic, and the area around the highway was a heavily wooded residential area. He landed the airplane in the highway ditch, impacting highway construction barriers and a concrete bridge abutment/culvert before coming to a complete stop. The pilot reported that he recalled hearing reduced engine noise but no backfiring or explosive noise when the engine had the loss of power. He had glanced at the engine instruments and recalls the manifold pressure and fuel flow being lower than normal. He reported that he thought the RPM fell to about 1000 rpm and the manifold pressure was around 10 inches of pressure. He reported the engine was running rough and surging a little. Witnesses to the accident reported that the airplane was flying at about 300 feet above ground level and that they heard the engine running abnormally. The witnesses used the words, "sputtering, missing and faltering, backfiring," and, "sounds like a motorcylce backfiring," to describe the sound of the engine. One witness reported that he thought the pilot was trying to stretch the glide in order to land in the ditch. Witnesses reported that the landing gear was down when the airplane made its emergency landing. An Airworthiness Inspector from the Federal Aviation Administration inspected the airplane. The inspector reported that the aircraft's fuel system, air induction system, ignition switch and wiring to the magneto, engine controls, and flight controls had continuiy or were capable of operating normally. Fuel samples were visually checked and reported to be clear and free of contamination. The spark plugs were checked and they appeared normal and did not indicate a rich mixture. (See attachments) The engine was removed from the airplane and delivered to Central Cylinder, Inc., Omaha, Nebraska, for testing. The engine was put on a test stand and run on August 17, 1995. The engine run revealed that the engine operated within the parameters specified in the Teledyne Continental maintenance manaul. (See attachments) The aircraft's weight and balance was determined to be within operating limits. The takeoff weight on the airplane was about 2856 pounds and was within the maximum gross weight limit of 2900 pounds.