On August 2, 1995, about 1740 central daylight time, a Cessna 150L, N1774Q, registered to a private individual, and operated by Memphis East Aviation, Inc., lost engine power and made a forced landing in a wooded area at Holly Springs, Mississippi, while on a 14 CFR Part 91 instructional flight. Visual meteorological conditions prevailed at the time and no flight plan was filed. The aircraft received substantial damage and the student pilot received minor injuries. The flight originated from Arlington, Tennessee, on August 2, 1995, about 1700. The pilot stated he flew from Arlington to Holly Springs, Mississippi, where he performed a touch-and-go landing, and planned to return to Arlington. During climbout from the touch-go-landing, upon reaching an altitude of 150 feet, the engine lost power. He made a forced landing in a wooded area. Postcrash examination of the aircraft and engine by an FAA inspector and representatives of the operator showed the oil dip stick was lying loose in the engine compartment. No oil was present in the engine and no evidence of postcrash oil leakage was found. The exhaust stacks showed evidence of having been excessively heated. The Nos. 2 and 3 cylinder valves were being held open by excessive carbon build up, causing low cylinder compression.