On May 5, 2001, at 0930 hours Pacific daylight time, a De Havilland Tiger Moth DH 82A, N838KC, experienced a loss of engine power after takeoff from runway 7 at the Sonoma Valley Airport, Schellville/Sonoma, California. The airplane came to rest inverted after the right wing dragged the ground during the attempted off-airport emergency landing. The airplane, owned and operated by the pilot under the provisions of 14 CFR Part 91, sustained substantial damage. The private pilot and one passenger sustained serious injuries. Visual meteorological conditions prevailed for the local area flight. No flight plan had been filed. A Federal Aviation Administration (FAA) inspector interviewed the pilot. The pilot stated about 3 weeks prior to the accident the airplane was involved in an incident. After landing, he (the owner/pilot) lost directional control, the airplane departed the runway, and went into a ditch where it came to rest on it's nose. The nose down attitude put the forward part of the fuel tank under water, which includes the vent valve, which is where the filler cap is also located. The pilot stated that the airplane was returned to its hangar and he drained the fuel tank and ran fresh fuel through the system. No discrepancies were noted. The pilot stated that he did not properly ensure that all the water had been removed from the forward section of the fuel tank. The fuel tank is divided into two sections and connected by a pipe. A small amount of water may have remained in the system and became trapped in the forward section of the tank. When the airplane was in a climb out configuration the fuel would flow back to the fuel cock area, but would not have affected the engine run-ups that were conducted. The pilot stated that the propeller was destroyed in the event and was replaced with a new one. The pilot and a mechanic conducted a crankshaft "run-out check" with no discrepancies noted. After the new propeller was installed an engine run-up was conducted with no mechanical anomalies experienced. On May 2, 2001, the pilot was going to fly the airplane; however, the flight was cancelled due to high winds. On May 3, 2001, he conducted a preflight, performed an engine run-up, refueled the airplane with 17 gallons of fuel, and placed the airplane back in its hangar. The pilot stated that the accident flight was the first flight since the incident 3 weeks prior. On the day of the accident he conducted a preflight inspection, as well as a ground run-up, prior to takeoff. He stated that there were no mechanical anomalies noted with the airframe or power plant. After takeoff, about 3/4 of the way down the runway; the airplane experienced a gradual loss of engine power. The airplane was at 100 feet above ground level (agl), and the pilot realized that he would not be able to make it back to the runway. He maneuvered the airplane by initiating a 90-degree right-hand turn to avoid a levee in his immediate flight path. He remembers attempting to return the airplane to a straight-and-level flight attitude. His next recollection was walking around the inverted airplane with an ambulance headed in his direction. The FAA inspector conducted an on-site investigation and noted that the right wing appeared to have struck first, then the nose, and the airplane nosed over inverted. He also observed fuel leaking from the airplane. The airplane was inspected at the owner's facilities on May 23, 2001, under the supervision of the FAA. The fuel and air intake systems were examined for contamination and obstructions. Mechanical continuity between the throttle quadrant in the cockpit and the carburetor were examined with no anomalies noted. The fuel vents and plumbing were clear of debris and appeared functional. The air intake points were unobstructed. The FAA inspector reported that all of the linkages and mechanical connections to the engine appeared intact and moved freely when engaged. The carburetor filter bowl was removed and examined. Small traces of water were present as well as fuel. There was no fuel found in the system. According to the FAA inspector the fuel system is gravity fed, and most likely drained out of the airplane when it was in the inverted position. The FAA inspector further noted that a fuel shutoff valve operating rod was found bent. A determination whether the bend occurred as a result of the accident or was preaccident could not be made.