On October 24, 1999, at 1615 central daylight time, a Bellanca 7ACA tail-wheel equipped airplane, N138MB, was substantially damaged while maneuvering following a partial loss of engine power during takeoff from the North Little Rock Airport (1M1), near North Little Rock, Arkansas. The non-instrument rated private pilot and her passenger sustained minor injuries. The airplane was owned by a private individual and operated by Barrett Aviation, Inc., of North Little Rock, Arkansas. Visual meteorological conditions prevailed for the Title 14 CFR Part 91 personal flight, for which a flight plan was not filed. The local flight was originating at the time of the accident. The pilot reported to the FAA inspector, who traveled to the accident site, that during the takeoff from runway 35, she noticed that the ground roll seemed longer than usual. The pilot added that the airplane became airborne at 50 mph and climbed to approximately 50 feet agl. She checked the engine instruments and noticed that the tachometer was indicating 2,200 rpm. She became aware that something was not right and lowered the nose of the airplane to attempt to increase the airspeed to 60 mph. By the time 60 mph was attained, the airplane was too far down the 3,009 foot runway to abort the takeoff. The 179-hour pilot stated that she was aware of the trees to her right, a fence, and a roadway at the end of the runway, and elected to turn left and attempt to return to the runway. During the turn, the right wing of the airplane impacted a gully at the departure end of runway 35. The pilot added that the engine was still running when the airplane touched down. The FAA inspector reported that the fuselage of the 1972 vintage airplane was twisted and the wing spar sustained structural damage. The reason for the partial loss of engine power could not be determined.