On August 8, 2000, at 0800 central daylight time, a Schweizer G-164B, N3629D, operated by Wallace Flying Service Incorporated, was substantially damaged on impact with terrain, in Wallace, Nebraska, following a loss of engine power. The airplane nosed over in a field during the forced landing. Visual meteorological conditions prevailed a the time of the accident. The 14 CFR Part 137 aerial application flight was not operating on a flight plan. The commercial pilot reported no injuries. The local flight originated from the Wallace Municipal Airport, Wallace, Nebraska, at 0700. The Federal Aviation Administration Inspector stated that during the engine test run, the engine (Pratt & Whitney R1340-AN1) would not hold an engine speed above 600 rpm. Examination of the engine revealed that the number 3 cylinder exhaust rocker play was in the range of approximately 0.010-0.125 inches. The top end of the number 3 push rod assembly (part number 11876) had fractured in the area where the tube slides into the end fitting. Photos are included in this report. The engine accumulated a total time of 5,187 hours and 182 hours since overhaul.