On August 11, 1996, at 1922 central daylight time, a Schuler T Bird II, N31774, operated by a student pilot collided with the terrain following a reported loss of engine power during takeoff. The takeoff was being conducted from a farm field in Fond Du Lac, Wisconsin. The pilot and passenger were seriously injured. The airplane was substantially damaged. Visual meteorological conditions prevailed and no flight plan was filed. The student pilot reported that during the initial takeoff climb a total loss of engine power occurred. The accident site and wreckage were inspected by a Federal Aviation Administration Principal Maintenance Inspector (PMI) from the Milwaukee Flight Standards District Office. The PMI reported that the only problem he saw with the engine was a soldered ignition wire which was not properly insulated. The PMI stated that there were trees which were approximately 30 feet tall located at the end of the grass strip which was used for takeoff. He stated the airplane cleared the trees and impacted the terrain approximately 10 feet away from the treeline.