On August 19,1998, at 1400 eastern daylight time, a Piper PA-12, N78583, ditched in the Atlantic Ocean, according to the operator, following a loss of engine power near Myrtle Beach, South Carolina. The banner tow flight was operated by Barnstormer Flite Signs Inc., under the provisions of Title 14 CFR Part 91 with no flight plan filed. Review of weather data from the nearest reporting facility disclosed that visual weather conditions prevailed at the time of the accident. Considering the airframe damage described by the operator, the airplane sustained substantial damage. The commercial pilot was seriously injured. The banner tow flight initially departed Myrtle Beach, South Carolina, at 0900. On August 18, 1998, the pilot reported that he experienced an unspecified vibration in the engine during the flight of that day. He also reported that the 50-hour oil change inspection was due and was not completed. On August 19, 1999, the pilot reported that after the initial takeoff of the day he experienced engine vibrations and was not comfortable about the first banner pickup of the morning. He decided to fly to a holding area to resolve the vibration problem. After about three minutes, the pilot returned and picked up the banner. After flying approximately five hours, the pilot reported what he described as a low frequency vibration in the engine. The pilot attempted to resolve the vibration problem by adjusting the mixture and checking the magnetos. Moments later, the engine lost power, and the pilot was no longer able to maintain flight. The pilot elected to ditch the airplane in the water east of Myrtle Beach Airport (see attached pilot statement). During the examination of the airplane, approximately one ounce of fuel was drained from the fuel line that connects to the left fuel tank. Examination of the fuel system failed to disclose breaches or leaks. The carburetor examination also failed to disclose the presence of fuel. According to the operator, N78583 was topped off with 38 gallons of fuel before the pilot departed. He also reported that the normal fuel consumption for this airplane with the Lycoming O-320 engine was approximately eight gallons per hour. During a telephone conversation with the pilot, he told the Federal Aviation Administrator Inspector that he "may have run out of fuel" (see attached inspector's report).