On January 19, 2002, approximately 1520 mountain standard time, a Mooney M20E, N38AJ, registered to and operated by Valley Aviators, Inc., and being flown by a private pilot, was substantially damaged when it impacted terrain following a loss of control during the initial takeoff climb at the Glasgow International Airport, Glasgow, Montana. The pilot sustained minor injuries. Visual meteorological conditions prevailed and no flight plan had been filed. The flight, which was personal, was operated under 14 CFR 91, and was local in nature. An inspector from the Federal Aviation Administration's (FAA) Helena Flight Standards District Office (FSDO) examined the aircraft and accident site. He reported that the first evidence of ground impact was slightly north of the north edge of runway 12 and approximately 2,200 feet southeast of the runway threshold, and that the aircraft came to rest about 126 feet south of the south edge of runway 12 (refer to photograph 1). He also noted debris as well as scrape marks on runway 12 extending from the initial ground impact site and south-southwest towards the final resting place (refer to DIAGRAM I). The aircraft's right wing was observed deformed upward and aft, and the underside of the wing showed scratches oriented approximately 45 degrees to the chordline (refer to photograph 2). The inspector noted that the aircraft's landing gear lever was in the down (retracted) position but not locked and examination of the underside of the aircraft revealed that the right main landing gear was not fully retracted. In an interview with the inspector, the pilot reported that he was taking off from runway 12 and rotated approximately 60-65 miles per hour (MPH). He also reported that he was having difficulty in retracting the landing gear, i.e., stowing the gear retract handle in the down and locked position. He then became distracted with the gear retraction process and visually focused on the gear retraction handle between the two front seats. Shortly thereafter, he realized the aircraft had transitioned to a nose high and slow airspeed condition and he pitched the nose down to increase airspeed. He recalled seeing the ground through the windscreen and sensing a degradation of control effectiveness, but he did not hear the stall warning horn. The pilot also reported to the inspector that it was necessary to raise the landing gear prior to 81 MPH in order to fully retract the landing gear (and lock the gear retraction handle in the down position). A witness, who observed the aircraft during the takeoff reported that the aircraft climbed to an altitude of about 40-50 feet above ground and banked to the left before crashing (refer to ATTACHMENT W-I). The aircraft is equipped with a manual gear extension/retraction system (described in ATTACHMENT OM-I). The Owner's Manual for the Mooney M20E aircraft states that "...The more rapid the movement of the [gear retraction] handle, the easier it is to retract the gear. The gear retracts easiest at low airspeeds..." (refer to ATTACHMENT OM-I). The Owner's Manual also provides a chart showing stalls speeds as a function of angle of bank and flap position. The chart shows a stall speed of 64 MPH for 15 degrees of flap (takeoff setting) and zero degrees angle of bank.