On June 26, 1997, about 1030 Alaska daylight time, a tundra tire equipped Piper PA-18, N1386A, crashed during a forced landing at the Birchwood Airport, Chugiak, Alaska. The airplane was being operated as a visual flight rules (VFR) local area instructional flight when the accident occurred. The airplane, registered to and operated by the second pilot, sustained substantial damage. A certificated private pilot (second pilot), seated in the front seat, and a certificated commercial pilot/flight instructor (first pilot), received minor injuries. Visual meteorological conditions prevailed. The second pilot said the purpose of the flight was to renew an expired biennial flight review (BFR). The second pilot's last BFR was March 24, 1995. Before the flight, the second pilot said he drained the airplane fuel tank sumps, and did not notice any contamination. An engine run-up was completed without any deficiencies, and the fuel selector was positioned on the left tank. After takeoff, about 400 feet above the ground, the engine began to lose power and run rough. The first pilot joined the second pilot on the controls. The airplane began to lose altitude, and a turn back toward the airport was initiated. Cockpit emergency procedures performed by the second pilot failed to restore engine power, and the airplane was unable to glide back to the runway environment. The second pilot selected an emergency landing area in an area of small trees and brush. The airplane collided with several trees, and received damage to the fuselage and wings. The second pilot reported the last annual inspection of the airplane was December 27, 1995. The airplane had accrued 52 hours since the last inspection. The second pilot indicated he utilized a mixture of 25 percent aviation fuel, and 75 percent automotive fuel for the accident airplane. The fuel was stored in the second pilot's personal fuel tank, on which two fuel filters are installed. The left fuel tank of the airplane was filled the day before the accident. The right tank of the airplane was filled to the 3/4 mark the morning of the accident. The airplane was an additional auxiliary fuel tank installed in the left wing, and the second pilot reported it contained about 5 gallons of fuel. After recovery, the airplane was examined at Wick Air Inc., Palmer, Alaska. The examination revealed the airplane's fuel selector valve has 4 positions; LEFT, RIGHT, LEVEL FLIGHT, and OFF. The airplane's auxiliary fuel tank is routed to the LEVEL FLIGHT selector position, and does not have a separate header tank. The selector exhibited internal thread damage. The "O" ring between the internal plastic bushing and the valve body, was split. A positive detent for each tank position was not noted. The left tank, and auxiliary fuel tank cap rubber seals, exhibited cracking. The presence of rust was noted on the inside portion of each fuel tank cap. Examination of the engine revealed gear and valve train continuity, and thumb compression in each cylinder upon hand rotation of the crankshaft. The carburetor bowl contained a golden colored fluid mixed with water. The accelerator pump functioned upon hand activation. Fuel was drained from the right wing fuel tank. The fuel exhibited a clear color, and a strong odor of gasoline. Fuel drained from the left wing tank, and the left wing auxiliary tank exhibited a golden color mixed with water. A sample of fuel from the second pilot's storage tank was submitted to CT and E Environmental Services Inc., Anchorage, Alaska, for analysis. The fuel sample failed the specifications for aviation gasoline.