On December 29, 2003, at 1005 Pacific standard time, a float equipped Cessna 172N, N461BD, collided with water during the takeoff roll from Melone's Reservoir near Angels Camp, California. The pilot was operating the borrowed airplane under the provisions of 14 CFR Part 91. The certified flight instructor (CFI) and the pilot undergoing instruction (PUI) were not injured; the airplane sustained substantial damage. The flight departed Spence Pond at 0905 for the local area instructional flight. Instrument meteorological conditions prevailed at the Calaveras Co-Maury Rasmussen Field (CPU), San Andreas, California, located approximately 10 nautical miles from the accident site. No flight plan had been filed. In a written statement, the CFI reported that the PUI was receiving training for his seaplane rating. After departure, they did a series of takeoffs and landings. The CFI contacted the Calaveras Airport UNICOM and was advised that winds were at 14 knots gusting to 22. During the last landing into a confined area, they experienced a left crosswind. The PUI attempted to takeoff from the area, but the CFI aborted the takeoff as the airplane veered to the right. The weather conditions deteriorated and they decided to return to Spence Pond. They sailed about 1/4 mile and it appeared they could takeoff into the wind. The CFI attempted the takeoff. After applying power, the left wing came up; however, the airspeed was still below liftoff airspeed, and the airplane had not come up on the step. The CFI closed the throttle and the right float dug into the water. After the upset, the CFI and PUI climbed onto the wings and were later rescued. No mechanical malfunctions were noted.