On July 6, 1997, at 0900 central daylight time, a Cessna P210N, N222WE, collided with the water during an emergency landing following what the pilot reported as a loss of engine power after takeoff from the Destin/Fort Walton Beach Airport in Destin, Florida. The pilot stated that the personal flight operated under the provisions of Title 14 CFR Part 91 with an instrument flight plan filed. The pilot said visual weather conditions prevailed at the time of the accident. The on site examination of the airplane by a mechanic disclosed that the airframe had sustained substantial airframe damage. The pilot reported that he and his passenger received minor injuries. The pilot said that the accident occurred during the initial climb out from Destin, Florida. The pilot stated that they were on the initial climb out, between 500 and 800 feet, when the engine developed a partial loss of power. When the engine RPM dropped to 1500, the pilot realized that he could not return to the shore line for an emergency landing. The pilot ditched the airplane in the Gulf Of Mexico. The pilot stated that they were rescued by jet skiers in the vicinity of the accident site. Several days after the accident, the aircraft was recovered from the water. During the examination of the engine, a stainless steel flex fuel line was found against the induction elbow on the left side of the engine (see attached FAA Inspector's Statement). There was a hole in the induction elbow at the point where the braided fuel line crossed over the intake manifold. The initial examination disclosed that the internal engine components would not rotate. During the engine examination, there was no metallic debris found in the oil sump. All cylinders displayed deposits of rust like materials. The piston rings were partially stuck to the grooves of the pistons. All intake and exhaust valves were seated. The crankcase main bearings exhibited normal wear. Both magnetos assemblies exhibited corrosion damage to the housing and the internal components were exposed (see attached report of engine examination). The left induction elbow, with the hole, was installed on another IO-520 engine, and the engine was mounted on an engine test cell. A functional run of the engine disclosed that the manifold pressure at full power was the same as the manifold pressure at full power for an induction elbow without a hole.