On May 4, 2002, at 1155 eastern daylight time, a Piper PA-38-112, N2494B, was substantially damaged during a hard landing at the Hastings Airport (9D9), Hastings, Michigan. Visual meteorological conditions prevailed at the time of the accident. The instructional flight was being conducted under the provisions of 14 CFR Part 91 without a flight plan. The certified flight instructor (CFI) and his single student were not injured. The flight departed 9D9 at 1115 for the local flight. According to the CFI's written statement, after completing some basic flight maneuvers in the practice area they returned to the departure airport to practice landings. The CFI reported that on the first approach to runway 12 (3,900 feet by 75 feet, dry/asphalt) the student, "flared high and drifted left of the runway." The CFI stated the student executed a go-around without incident. The CFI reported that on the second landing attempt, "... the student was maintaining the extended centerline on final, then over the numbers he flared ~15 - 20 ft AGL [feet above ground level] and drifted left of the runway. I called for 'Go around'; the student had already initiated it [the go-around] by applying full throttle and pitching for a climb attitude." The CFI stated during the go-around the airplane continued to "... sink towards the ground. I called 'my airplane', and took over the controls. My first action was to verify throttle and mixture were both full forward-which they were. At this time the stall warning horn sounded so I immediately lowered the nose to gain airspeed. At this point we were ~5 feet off the ground parallel the runway over the left runway lights and still sinking. I was unable to maintain level flight in ground effect and I remember the right wing was lowered in an attempt to get back to the runway. I rolled wings level and raised the nose, then we struck a runway light and landed main wheels first on the grass to the left of the runway. The aircraft impacted a yellow cone (from runway 18-36), then the prop dug in and we spun to a stop nose down in the grass." According to the student pilot's written statement, during the second landing attempt a go-around was attempted. The student pilot stated, "... I applied full power to abort the landing, as my CFI stated the landing was to be aborted. With full power applied the plane started to sink. The instructor took control of the airplane. The plane refused to fly and went down to the left of runway 12. We hit runway lights and a runway sign. For most of the time as we went down I had my eyes closed and only saw the airplane hit a runway light and the ground [as] we came to a stop."