On May 19, 2004, at 1430 central daylight time, a Canadian registered Cessna 180J floatplane, CGNQK, sustained substantial damage during a forced landing after a loss of engine power on takeoff. The private pilot and passenger were not injured. The 14 CFR Part 91 local maintenance flight was departing Fleming Field (SGS), South St. Paul, Minnesota, when the loss of engine power occurred. Visual meteorological conditions prevailed. No flight plan was filed. The pilot reported that a new 300 horsepower Continental IO-550-D37 engine had been installed on the airplane and a maintenance flight was required to "break in" the new engine. As part of the engine conversion, a small header tank that held about 1.5 gallons of fuel was installed on the airplane. He reported that the fuel selector was left in the "OFF" position prior to takeoff, and he forgot to put the fuel selector in the "BOTH" position. He reported that the airplane climbed to 500 feet above ground level and then the engine lost power. He turned back to the airport and impacted the terrain on the airport property.