On March 31, 1997, about 1745 eastern standard time, a homebuilt Zephyr II, N52958, registered to a private individual, collided with terrain following an in-flight loss of control during a forced landing after takeoff from the Flagler County Airport, Bunnell, Florida. Visual meteorological conditions prevailed at the time and no flight plan was filed for the 14 CFR Part 91 personal flight. The airplane was substantially damaged and the private-rated pilot, the sole occupant, sustained serious injuries. The flight originated about 5 minutes earlier from the Flagler County Airport. The pilot stated that during the upwind leg after takeoff about 300 feet above ground level (agl), the engine experienced an rpm drop from 6,200 to between 2,500 and 3,000. He then initiated a turn downwind and then again turned upwind and when the flight was about 75 feet agl, he encountered loss of elevator control. The airplane then descended nose low and impacted the ground adjacent to the intended touchdown location. Postcrash examination of the engine revealed a 1/4 inch section of the top compression ring was missing with an associated scar on the piston. Fuel contamination was not noted and there was no evidence of detonation or blockage of the air filter. Both the choke levers were determined to be closed.