On May 31, 1999, about 1830 eastern daylight time, a Cessna 172, N1223F, was substantially damaged while attempting a go-around at the Greenwood Lake Airport, West Milford, New Jersey. The certificated flight instructor received minor injuries, and two student pilots were not injured. Visual meteorological conditions prevailed and no flight plan was filed for the instructional flight conducted under 14 CFR Part 91. In a written statement, the flight instructor stated that the purpose of the flight was to conduct "routine" training with two students. Before the flight, he calculated that the airplane was within weight and balance. In addition, he sated that the preflight, and engine run-up were "normal." After conducting "airwork" for 1 hour, the airplane entered the traffic pattern for runway 24 at Greenwood Lake with the student at the controls. The flight instructor observed the wind sock fully extended, and indicated winds out of the south. Pre-landing checks were completed on downwind, and the approach was normal with full flaps extended. When the airplane was 10 to 15 feet above the runway, the student initiated a flare. The instructor advised him he was too high, and to pitch the nose of the airplane down to prevent a loss in airspeed. The student complied, and the flight instructor remembers the airspeed to be 55 knots. After pitching the airplane down, the student was having difficulty controlling the airplane's drift and alignment with the runway. The approach continued until 5 to 10 feet above the runway and "just" passed the approach end. The instructor advised the student he had the controls, and the student released them. The airplane had not touched down, and the instructor "immediately" decided to execute a go-around. He applied full power, pushed the carburetor heat off, and retracted the flaps to 10 degrees. Backpressure on the yoke was increased "slightly" during the flap retraction to maintain a nose up attitude. After retracting the flaps, the instructor felt the airplane was "sluggish," and not climbing, so he lowered the nose to maintain airspeed. An "overwhelming" gust then pushed the airplane off the right side of the runway. The airplane then descended into rough terrain causing substantial damage. The pilot added, "During a normal go-around, the airplane pitches up with the application of full throttle, and forward pressure is required to prevent a dangerous nose-high attitude....On this occasion however, despite full throttle, the airplane refused to climb, and it became apparent that the engine was not developing full power." In a telephone interview, the instructor stated that after executing the go-around he felt the airplane was slow, but how slow he could not remember. He added that maximum climb airspeed is 76 knots, but he usually climbs at 70 knots. In addition, when he advanced the throttle for the go-around, the engine responded and sounded "normal." Under the supervision of a Federal Aviation Administration Inspector, the engine was run on June 3, 1999, at Greenwood Lake. During the engine run, the throttle was advanced until engine rpm stabilized at 1500 rpm. A check of the engine's ignition system was then preformed, and a drop of 75 rpm was observed on both the left and right magnetos. Engine rpm was limited to 1500 because of propeller damage, and engine vibration. The inspector added that during his examination, he observed no anomalies with the engine or airframe that would have prevented the engine from developing takeoff power. In a subsequent telephone interview, the instructor stated that the stall warning horn was not on during the go-around, but the airplane "felt like it was near a stall." In addition, he stated that "nothing in the sound of the engine was different" than other times he has applied takeoff power. After stating he noticed no problems with the engine, the instructor continued to assert that he felt the accident engine did not produce takeoff power during the go-around. Also during the interview, the instructor stated that the accident airplane experienced a partial loss of power two months prior with a different pilot. Examination of the engine after that incident was inconclusive. The airplane's information manual stated the following procedure for a balked landing. "In a balked landing (go-around) climb, reduce the flaps setting to 20 degrees immediately after full power is applied. If obstacles must be cleared during the go-around climb, reduce the wing flap setting to 10 degrees...." The information manual also prescribed 55 knots of indicated airspeed during the go-around. Stall speed for flaps down, and power off was listed as 44 knots.