On May 23, 1998, about 0900 Alaska daylight time, a tundra tire equipped Piper PA-18 airplane, N8578D, sustained substantial damage during a forced landing, about 40 miles west of Glennallen, Alaska. The airplane was being operated as a civil government flight under Title 14 CFR Part 135 when the accident occurred. The certificated commercial pilot, and the sole passenger aboard, received minor injuries. Visual meteorological conditions prevailed, and company flight following procedures were in effect. The flight originated from a private airfield about 35 miles west of Glennallen about 0800. During a telephone conversation with the National Transportation Safety Board investigator-in-charge, on May 27, 1998, at 1000, the pilot reported that he was conducting an aerial moose survey for the State of Alaska. The passenger was a wildlife biologist employed by the State of Alaska. The pilot said that while in cruise flight, about 500 feet above the ground, all engine power was lost. Attempts to restore engine power were unsuccessful, and he turned the airplane to avoid rising terrain. During the subsequent forced landing, the airplane collided with trees. The airplane received substantial damage to the wings, and fuselage. The pilot related he was not sure why the engine lost power, but he suspected the fuel may have been contaminated with water. He said it had been raining hard the day before the accident flight, and that during the preflight inspection preceding the accident flight, he noticed some water in one of fuel samples taken from a wing sump. A Federal Aviation Administration (FAA) airworthiness inspector, inspected the airplane wreckage, and obtained a fluid sample from the fuel system gascolator. The sample exhibited two obvious layers of separated liquid. The top layer consisted of a bluish liquid, consistent with the color of 100LL aviation fuel. The lower layer consisted of a clear liquid which appeared to be water. The NTSB investigator-in-charge tested the clear fluid with water finding paste. The sample tested positive for water.