On May 5, 1998, at 1734 central daylight time, a Piper PA-38-112, N24435, registered to the Offutt Aero Club, and operated by a private pilot collided with the terrain following a loss of engine power. The loss of power occurred during an initial takeoff climb from runway 30 at the Offutt AFB, Omaha, Nebraska. The pilot and passenger were not injured. The airplane was substantially damaged. Visual meteorological conditions prevailed and a VFR flight plan was filed. The flight had originated shortly before the accident with an intended destination of Sioux City, Iowa. The pilot reported that the engine start and run-up were normal with fuel pressure, oil pressure, and oil temperature gauges all indicating in the "green." The pilot continued to report that after a three minute hold due to wake turbulence, she was cleared to takeoff. The pilot reported that during the takeoff climb the engine seemed to be slowing down followed by the propeller coming to a complete stop. She stated she and her passenger, a student pilot, attempted to restart the engine to no avail. The pilot stated she selected a field in which to land, but the airplane touched down on a levee short of the field. The airplane slid sideways damaging the landing gear, fuselage, and both wings. Post accident inspection of the airplane was conducted by an Inspector from the Federal Aviation Administration (FAA), Lincoln, Nebraska, Flight Standards District Office. Inspection of the airplane revealed it had a Lycoming O-235-L2C engine, s/n L- 21202-15, installed on it. The engine had a total time of 6,461.7 hours, 2,148.7 hours since overhaul. Further inspection of the engine revealed a failure of the crankshaft, p/n LW-12697, at the #3 main bearing journal. The crankshaft, crankcase, camshaft, the #3 bearing, and other miscellaneous parts were sent to the University of Dayton Research Institute at Wright-Patterson AFB for a metallurgical examination. This examination revealed "Macroscopic indications of fatigue propagation were observed on the fracture surface. The fatigue initiated at a 'groove' in the bearing shoulder (figures 6 and 7). The groove is located in the radius where the journal transitions to the shaft. The groove extends around approximately three quarters of the circumference of the shaft." The report continues, "The location of the groove on the bearing shoulder is precisely aligned with the edge of the bearing. This contact occurs only when the bearing is displaced aft of center in the journal (figure 8)." "Circumferential marks were observed on the outer diameter (OD) of the #3 bearing (figure 11)." "The aft inner diameter corner of the bearing was heavily worked." "The interior of the crankcase was examined. Circumferential marks were detected at main bearing #3 (figure 14)." A review of maintenance records revealed the overhauled engine was installed on N24435 on September 17, 1992. The engine had a total time of 4,313 hours when installed. On March 9, 1992, at a total engine time of 4,506 hours, the crankshaft flange was inspected and a new propeller was installed due to a propeller strike incident. On October 3, 1997, at a total engine time of 6,295 hours, a new propeller was installed due to another propeller strike incident. On April 18, 1998, the Discrepancy Log showed a loud "pop" was heard during takeoff at which time the oil pressure went from 60 psi to 90 psi then back to 60 psi. On final approach the oil pressure dropped to 3 psi and the pilot reported having to maintain 1,400 rpm in order to maintain 5 psi. The corrective action was "Cleaned & adjusted oil pressure regulator & installed serviceable oil pressure sending unit... ." On April 21, 1998, the Discrepancy Log showed a that the oil pressure reading dropped to 5 psi during an engine run-up at 1,800 rpm and it decreased to 0 psi during taxi. The corrective action for discrepancy was "Cleaned pump screen, changed oil and oil filter. Changed oil pressure sensor, and calibrated oil pressure gauge." Textron Lycoming Service Letter, L163C, recommends "...that in a case of sudden engine stoppage, propeller strike, loss of propeller blade or tip, the safest procedure is to remove and disassemble the engine and completely inspect the reciprocating and rotating parts including crankshaft gear and dowel parts."