THE ACFT WAS FLOWN FROM A PVT STRIP TO A NRBY ARPT AT STATESBORO, GA FOR REFUELING. AFTER THE ACFT WAS REFUELED, THE ENGLOST PWR AS THE STUDENT PLT WAS TAXIING TO TAKEOFF. WATER WAS FND IN THE SUMPS, & RPRTDLY, 4 TO 6 SAMPLES WERE REQUIRED TO DRAIN WATER FROM EACH TANK. AFTER THE ENG WAS STARTED, THE ACFT WAS RPRDLY FLOWN TO SWAINSBORO, GA, THEN THE PLT TOOKOFF ON A FLT TO WAYNESBORO, GA WITH A PAX ABOARD. HE RPRTDLY MISSED HIS DESTN ARPT & STARTED AN APCH TO LAND AT BUSH FIELD AT AUGUSTA, GA. WHILE ON THE APCH, THE ENG LOST PWR & THE STUDENT PLT WAS UNABLE TO RESTART IT. DURING AN EMERG LANDING, THE ACFT COLLIDED WITH TREES & BOTH WINGS WERE EXTENSIVELY DAMAGED. A POST-CRASH EXAM REVEALED NO EVIDENCE OF A MECHANICAL FAILURE. FLUID THAT WAS DRAINED FROM THE CARBURETOR & GASCOLATOR WAS MOSTLY WATER. THE STUDENT PLT NOTED THAT THE ACFT'S FUEL TANKS HAD A TENDENCY TO ACCUMULATE WATER WHEN THE ACFT WAS PARKED FOR ANY LENGTH OF TIME; HOWEVER, THE SOURCE OF THE WATER WAS NOT VERIFIED. A CHECK OF THE STUDENT PLT'S BLOOD SHOWED AN ALCOHOL LVL OF 0.262%.