On September 21, 1996, at 1300 mountain daylight time, a Cessna 177RG, N7568V, came to rest in a lake at the end of runway 26 after an aborted takeoff at Boulder Municipal Airport (1V5), Boulder, Colorado. The certified flight instructor, student pilot, and passenger were not injured and the aircraft sustained substantial damage. Visual meteorological conditions prevailed for this cross country instructional flight operating under Title 14 CFR Part 91. No flight plan was filed and the intended destination was Fort Collins, Colorado (3V5). According to the flight instructor, (statement attached) the flight departed Fort Collins 3V5 earlier in the day and encountered only light chop at their cruising altitude of 6,500 feet above mean sea level (msl). On arrival at Boulder 1V5, the flight encountered "light to moderate turbulence" in the pattern and the airport advisory provided information of winds from the south at about 3 knots. The flight instructor said they watched other aircraft operate while they were on the ground and discussed their return to Fort Collins. She stated "the windsocks along the field had been showing steady WNW wind for the past hour. I called Dakota Aviation (on the west end of the field) during taxi and received the advisory wind at WNW at 16 gusting to 21. The windsocks I could see appeared to agree with this." According to her statement, engine run up was normal and she applied full power for takeoff on runway 26 before releasing the brakes. She said she was using 10 degrees of flaps and acceleration was normal with rotation occurring at about 60 knots. Shortly after takeoff she said she felt the plane sink and she leveled pitch to gain airspeed. The aircraft recontacted the ground and got airborne again. She said she felt the aircraft settle, the stall warning went off, and the controls felt "extremely mushy." She then aborted the takeoff by pulling the throttle to idle and raising the nose to a landing attitude. Her statement says the aircraft recontacted the runway a third time and both she and her student applied heavy brakes. The aircraft exited the right side of the runway, rolled down an embankment, and entered the lake. The water was "wading deep" and all occupants exited the aircraft uninjured. A statement by a Boulder emergency dive team member is attached. According to that statement, the aircraft was facing west with the left main landing gear and nose landing gear collapsed and damage to the leading edge of the left wing. The dive team entered the water to retrieve the aircraft and turned off the fuel selector, magnetos, and removed the key. They then removed the aircraft and turned off the master switch. The owner of the aircraft came and removed the ELT (emergency locator transmitter), which had not activated, and some radios and the dive team drained some fuel from the left wing which was leaking. In his statement, the dive team member said that between 10:00 and 11:30 gusty winds were present in the area and when he arrived the winds were steady at 10 to 15 knots. According to the person who was "working the desk" at Flat Irons Aviation, the local FBO (fixed base operator), at the time of the accident, the wind was steady out of the west at 15 to 20 knots. According to Cessna Aircraft, there are no abort procedures spelled out for this model aircraft and the closest to that would be the procedures for engine failure during takeoff run. A copy of those procedures, emergency airspeeds, normal takeoff procedures, and takeoff distances is attached. A telephone interview was conducted with the airport manager who forwarded information concerning west takeoff at 1V5. Those procedures include a caution "severe turbulence, vertical currents and wind shear during strong west winds." These apply for takeoff on runway 26 and a copy is attached. In addition, a copy of the Airport Directory page containing information on 1V5 runway 26 departure caution is attached.