On June 27, 1996, at 1242 hours Pacific daylight time, a Cessna 150H, N7260S, collided with the ground during a forced landing attempt from the takeoff initial climb at the San Carlos, California, airport. The forced landing was precipitated by a failure of the flaps to retract. The aircraft was operated by Transair of San Carlos, and was on a local area dual instructional flight. Visual meteorological conditions prevailed at the time and no flight plan was filed. The aircraft sustained substantial damage. The certificated commercial pilot/flight instructor and his dual primary student sustained minor injuries. The flight originated at San Carlos on the day of the accident at 1219 as a traffic pattern operation engaged in touch-and-go operations. The instructor stated that they had performed four touch and go's in the traffic pattern. During the accident sequence, the student landed and moved the flap selector to the up position, then added full power to takeoff. The student rotated and lifted off from the 2,600-foot-long runway just as the instructor realized that the flaps had not retracted. The flaps did not respond to repeated movement of the selector handle. At this point, the aircraft had passed the end of the runway and would not climb as the airspeed began to decay. The instructor said he attempted to land the aircraft in a clear area straight ahead; however, touched down hard and collapsed the nose gear. A ground witness observed the takeoff attempt of the aircraft and reported that after gaining about 100 feet of altitude it seemed to encounter a problem, then began losing altitude. The witness observed the flaps in the full down position and noted that the aircraft seemed to be slowing down and losing altitude at a more rapid rate. He said the aircraft nose rose, then the aircraft stalled and descended nose down to ground impact with the left wing and nose, followed by the right wing. An examination of the aircraft by an FAA airworthiness inspector from the San Jose, California, Flight Standards District Office revealed that the flaps were in the full extended position. The flap system fuse in the cockpit was determined to be a 20 amp fast blow fuse and was found burned out. The Cessna Aircraft Parts Manual for the aircraft specifies a 15 amp slow blow fuse for the flap system. Corrosion deposits were found on the fuse and the fuse holder. Under the supervision of the inspector, company maintenance personnel conducted an inspection of the flap system and found no other discrepancies. The fuse was replaced and the system functionally checked in accordance with the Cessna maintenance manual. The flap system passed the functional check. Review of the aircraft maintenance records disclosed that an annual inspection was completed 1 month and 27 hours prior to the accident. The Cessna Aircraft maintenance manual for the Cessna 150 specifies that all fuses must be checked during each 50-hour and annual inspection. An engineering representative from Cessna Aircraft Company was contacted and he reported that during certification flight testing the Cessna 150H demonstrated the capability for a positive climb gradient with full flaps. At sea level on a standard day, and at gross weight, the aircraft is capable of 175 feet per minute.