On May 30, 1996, at about 2010 eastern daylight time, a Bellanca 300A, N14765, experienced smoke in the cockpit and a subsequent loss of engine power shortly after takeoff at the New Market Airport, in New Market, Virginia. The airplane descended into a field and impacted a fence, resulting in substantial damage. The pilot received minor injuries, and the one passenger (his wife) and the dog were not injured. Visual meteorological conditions prevailed, no flight plan was filed. The pleasure flight departed with an intended destination of Hummel, Virginia, and was conducted under 14 CFR Part 91. The pilot stated that shortly after takeoff he and his wife smelled smoke in the cockpit. He stated that it smelled electrical. He reported that he attempted to return to the airport but shortly after turning around the engine lost power. He said he saw an open field and made a gear up landing, and collided with a fence. Examination of the aircraft found that the left exhaust tailpipe had separated from the muffler and that the insulation around the electrical wire bundle which passed through the firewall was melted. According to the pilot, the electrical wiring in the melted bundle supplied power to the cockpit instruments and ignition system, including the ground leads for the magnetos. The pilot stated that he believed that "...during taxi, run-up, and takeoff, escaping exhaust gases melted the insulation [on the electrical wire bundle]. One magneto failed during takeoff run resulting in partial loss of power, and the other failed shortly thereafter from shorting of the "P" leads."