On July 17, 1999, at 1317 hours Pacific daylight time, a Piper PA32R-300, N1692H, sustained substantial damage when it collided with terrain during the takeoff initial climb from the Mammoth Lakes, California, airport. The commercial pilot and his passenger were not injured. The airplane was owned and operated by the pilot under the provisions of 14 CFR Part 91 for a cross-country personal flight. The pilot departed Mammoth Lakes 3 to 4 minutes prior to the accident en route to Oxnard, California. Visual meteorological conditions prevailed and a VFR flight plan was filed, but not yet activated. The pilot stated he flew into Mammoth Lakes the day before the accident. He was planning to fly to Oxnard and then on to Monterrey, California, where the airplane was based. He added full fuel prior to departure. The pilot listened to the AWOS (Automated Weather Observing System), which reported a density altitude of 9,400 feet. He reviewed the procedures for a high altitude takeoff, completed an engine run up, and leaned for departure. After taxiing into position for takeoff, he applied the brakes, then power. The pilot stated the runway was slightly uphill and he did not feel the airplane was developing full power, but did not abort the takeoff. The airplane climbed approximately 200 feet, but would not climb higher. After deciding an attempt to turn could induce a stall, the pilot lowered the landing gear and airspeed as much as possible. He maintained a controlled descent into the terrain and estimated his speed at touchdown was 50 to 60 knots. The pilot said he felt the density altitude prevented the airplane from climbing. The airport facilities/directory indicated Mammoth Lakes had an elevation of 7,128 feet msl (mean sea level). An aviation routine weather report (METAR) issued for Mammoth Lakes at 1251 reported the temperature was 73 degrees Fahrenheit and the altimeter setting was 30.22 inHg.