The aircraft crashed in a wooded area after a touch and go landing. The wing flaps lever had been placed to the up position but the flaps did not retract. When the CFI finally noticed that the flaps were not up he took over at about 200 ft AGL and started a shallow right turn. The airspeed was about 62 mph indicated when the CFI turned left with a nose high attitude. The aircraft stalled and spun to the ground about 600 ft from the departure end of the runway. The flap indicator registered 33 degrees. There was a notice posted below the flap indicator which read 'USE 30 DEGREE FLAP MAX'. Investigation revealed that the flap motor fuse was blown. Both pilots had been restrained by shoulder harness secured through interior plastic molding. At impact they came loose. This aircraft was not manufactured with shoulder harness. Aircraft logs did not show where, when or by whom the existing harness was installed.