On October 09, 2002, about 1200 Pacific daylight time, an unregistered Rans model S-12 XL, lost power during the takeoff initial climb and impacted the terrain in the San Luis National Wildlife Refuge near Los Banos, California. The private pilot/ owner was operating the airplane under the provisions of 14 CFR Part 91. The pilot and pilot rated passenger were not injured; the airplane sustained substantial damage. The personal cross-country flight departed the Harris Ranch Airport about 0930, en route to the Turlock (private) ultralight airstrip. Day visual meteorological conditions prevailed, and a flight plan had not been filed. According to the pilot, he felt a buffeting in the airplane about 1 1/2 hours into the flight and the engine rpm began to "run away." He set the airplane down in a dry clearing, which had recently been flattened by the U.S. Fish and Wildlife Service. After performing an engine check (running it) on the ground and noting no abnormalities, the pilot attempted to fly the airplane to his intended destination. Just after the takeoff rotation, the airplane lost forward thrust and pitched down, catching the nose and wing on the ground. The airplane cartwheeled, and came to rest inverted. Both occupants exited the airplane safely. A Department of Interior Officer witnessed the accident, and reported that the airplane was taking off downwind. The officer reported that the engine ground run was only about 30 seconds in duration before the takeoff. In a follow-up conversation, the pilot told the National Transportation Safety Board investigator that the propeller had been adjusted recently. He knowingly had been exceeding the engine rpm red line each time full power had been applied. The propeller would overspeed the engine, and the pilot did not readjust the pitch angle before this or previous flights. He stated that he did not bring the tools along to correct the problem, and thought that the blades may have become completely loose in flight from engine vibration. He also stated that he did not double-check a table that provided propeller pitch adjustments. The manufacturer recommended that the propeller be adjusted to approximately 400 to 500 rpm below red line using full power on the ground. This allowed for enough pitch and thrust to conduct flight tests. Best pitch can then be adjusted for straight and level flight using 200 to 300 below red line as the recommended reference. The pilot recovered the aircraft wreckage, which a dealer (Rans Aircraft of Lodi) later obtained and inspected. They received the airframe and engine without the propeller. The reduction gearbox ran successfully for approximately 20 hours on another engine. They found two plugs fouled, both of which were on the same ignition circuit. However, the coils did produce spark. They examined the ignition switches with an ohmmeter, and determined that the switches were functioning properly.