THE ACFT HAD FLOWN 228 HRS, SINCE THE ENG WAS OVERHAULED. THE OVERHAUL WAS DONE BY THE OWNERS & SIGNED OFF BY AN A & P MECH. DRG THE OVERHAUL, THE CAM SHAFT WAS GROUND & THE TAPPETS RESURFACED. THE LYCOMING O/H MANUAL STATED THAT IF THE CAM SHAFT WAS REPLACED OR REGROUND, NEW TAPPETS MUST BE INSTALLED TO PREVENT SEVERE WEAR & SPALLING OF THE CAM LOBES & TAPPET BODIES. EXAM OF THE ENG REVEALED THAT THE CAM LOBES & TAPPETS FOR THE #1 & #2 CYLS WERE SEVERELY SPALLED & WORN DOWN TO ABOUT HALF THE NORMAL PROFILE. LYC TECH REPS SAID THE CAM LOBE WEAR WOULD CHANGE THE DURATION & AMOUNT OF VALVE ACTION, REDUCING THE POWER OUTPUT ABILITY. OTR DISCREPANCIES WERE FOUND DURING THE EXAM OF THE ENG. AFTER DEPG, THE ACFT CLIMBED TOWARD THE MTNS. THE TRRN RISE WAS ABOUT 470 FT/MI & THE ACFT WAS CAPABLE OF CLIMBING AT ABOUT 350 FT/MI. WITNESSES SAW THE ACFT APCH THE MTN RIDGE LOW & SLOW, THEN TURN LEFT AS IT BEGAN A DSCNT TO THE GND. HIGH WINDS WERE BLOWING ACROSS THE RIDGE AT THE TIME & CLOUDS TOPPED THE MTNS.