On February 20, 2002, at 0930 central standard time, a Cessna 172M single-engine airplane, N238NY, was substantially damaged when it impacted trees during the initial takeoff climb from the Tarrant Field Airport, Mount Selman, Texas. The airplane was registered to and operated by K & S Enterprises LLC, of Tyler, Texas, doing business as the Tyler International School of Aviation. The flight instructor (CFI) sustained minor injuries and the private pilot receiving instruction was not injured. Visual meteorological conditions prevailed, and a flight plan was not filed for the 14 Code of Federal Regulations Part 91 instructional flight. The local flight originated from the Tyler Pounds Field Airport, Tyler, Texas, at 0830. According to the CFI, the purpose of the flight was to complete the first lesson toward the private pilot's instrument rating and provide him with an initial check-out in the Cessna 172. After completing the instrument training segment of the flight, the CFI began the familiarization training/check-out in the airplane. The CFI moved the throttle to idle to simulate an engine failure, and the student maneuvered the airplane to land at a nearby grass field. The CFI pointed out a grass airstrip, and the private pilot then began to set up the approach to runway 12 at the airstrip. During the approach, the private pilot performed the emergency engine failure procedures, turned the carburetor heat to the on position, and extended the flaps to the 20-degree position. The CFI stated that the private pilot cleared the engine one time during the approach. She added that the winds were from 300 degrees at 6 knots, and she briefed the private pilot on a downwind landing. The airplane touched down within the first 1,000 feet of the 2,700 foot-long airstrip, and the CFI then instructed the private pilot to go-around. The CFI stated that she retracted the flaps to the 10-degree position and once clear of power lines, she retracted the remainder of the flaps; however, the airplane then began losing altitude. Shortly thereafter, she stated to the private pilot that she had control of the airplane. Subsequently, the airplane contacted trees at the departure end of the airstrip. The airplane came to rest in a near nose down vertical attitude amongst the trees. During the impact, the empennage partially separated from the airframe. The private pilot reported that he landed the airplane and relinquished control to the CFI. The CFI applied full power and established a positive rate-of-climb, and the airplane cleared power lines. The airplane's engine then began losing power, and the airplane began to sink. Subsequently, the airplane contacted trees at the departure end of the airstrip and impacted the ground. The flight school examined the Lycoming O-360-A4M engine, under supervision of an FAA inspector. The propeller was rotated and crankshaft continuity was confirmed to the accessory drive gear. The engine did not exhibit any signs of catastrophic failure; however, the #2 cylinder valve cover displayed impact damage. A differential compression check of the cylinders was performed and the following values were observed: #1 72/80, #2 20/80, #3 75/80, #4 78/80. The oil filter, airframe fuel filter and carburetor fuel screen were examined and found free of contaminants. No preimpact anomalies were discovered with the engine.