On February 8, 2003, approximately 1145 mountain standard time, a Beech C23, N6555R, registered to and operated by the flight instructor, was substantially damaged when it collided with terrain following a hard landing at Pagosa Springs, Colorado. The flight instructor and student pilot were not injured. Visual meteorological conditions prevailed, and no flight plan had been filed for the local instructional flight being conducted under Title 14 CFR Part 91. The flight originated at Pagosa Springs approximately 0930. According to the flight instructor, after practicing stalls, steep turns, and simulated engine failures, they flew to Durango, Colorado, landed and refueled. They departed and returned to Pagosa Springs to practice traffic pattern emergencies. Runway 19 was the active runway. To simulate a power loss, the instructor reduced power to idle when the airplane was on the downwind leg, and the student pilot landed without incident. After practicing several other emergencies, they took off again. When the airplane had climbed about 60 feet, the instructor reduced power to idle to simulated a power loss on takeoff. The student made a "hard landing" and the airplane began drifting to the left. The instructor assumed control of the airplane but was unable to realign it with the runway. The airplane went off the left side of the runway and the left wheel broke off. It crossed a small ditch, sheared off the landing gear. The airplane collapsed, damaged both flaps, buckled the firewall, and bent the right rear horizontal stabilizer.