On October 15, 1999, about 1230 central daylight time, a Piper PA-28-161, N3013C, registered to AAC Enterprises, Inc., experienced a loss of engine power and on-ground collision with a tree shortly after takeoff from the Lee Field Airstrip located near Lebanon, Tennessee. Visual meteorological conditions prevailed at the time and no flight plan was filed for the 14 CFR Part 91 personal flight. The airplane was substantially damaged and the commercial-rated pilot, the sole occupant, sustained minor injuries. The flight was originating at the time of the occurrence. The pilot stated that no abnormalities were noted during the engine run-up performed before the flight departed. During the takeoff using runway 36, when the flight was approximately 75 feet agl, the "engine quit totally." He landed the airplane on the remaining runway and maneuvered towards trees located to the right of the runway centerline. Examination of the airstrip by an FAA inspector revealed that the airplane was facing south located among tall grass and scrub trees east of the runway. The airplane was upright and the right wing was separated; the wing was located approximately 20 feet from where the airplane came to rest. The engine and engine cowling reportedly showed no significant damage. Both fuel tanks were found to contain adequate fuel. With battery power applied to the airplane, the auxiliary fuel pump was turned on and with the fuel selector positioned to the "left" position, fuel leakage was noted from the gascolator. Examination of the gascolator revealed that safety wire was present but the bowl was loose. The safety wire was cut and the thumb screw of the bail wire was also determined to be loose. The bail wire of the gascolator was removed for further examination which revealed that 2 1/2 threads at the top of the threaded portion of the bail wire P/N 494 644, were failed. By design, the threaded portion of the bail wire assembly allows a thumb screw to travel the length to tighten or loosen the gascolator bowl. The tachometer time postaccident was noted to be 3,678.43. After the accident, the gascolator was bypassed due to the fuel leakage; the engine was started and operated for approximately 5 minutes. No discrepancies were noted with the engine during the engine run. Review of the airplane maintenance records revealed that an annual inspection was signed off on May 12, 1999, at a tachometer time of 3,675.8 hours. An entry in the aircraft maintenance records indicates in part that, "Replaced main fuel strainer seal and cleaned." The mechanic who performed the annual inspection and replaced the gascolator seal stated to the FAA inspector that he used the airplane manufacturer's checklist during the inspection, and he used a cork type seal. The pilot reported to the FAA inspector that on the first takeoff following the annual inspection from the airport where the annual inspection was performed, he experienced loss of engine power identical to the accident loss of engine power. He landed the airplane uneventfully. The pilot also stated to the FAA inspector that following the first loss of engine power occurrence, the mechanic who performed the annual inspection and himself discovered that the gascolator seal was not seated properly. A rubber type seal was then installed.