On July 21, 2004, approximately 1830 central daylight time, a Luscombe 8A, N45628, piloted by a flight instructor and dual student, sustained substantial damage during a in-flight collision with terrain after takeoff from runway 34 (2,997 feet by 75 feet, asphalt) at the Merrill Municipal Airport (RRL), Merrill, Wisconsin. The instructional flight was being conducted under 14 CFR Part 91 without a flight plan. Visual meteorological conditions prevailed at the time. The flight instructor and dual student reported no injuries. The local flight departed RRL about 1800 and was conducting touch-and-goes in the traffic pattern when the accident occurred. The flight instructor reported that they were practicing takeoffs and landings with a left crosswind of approximately 8 miles per hour. He stated that after completing the third landing, the student applied full power and lifted off with "near perfect" directional control. He noted that the aircraft subsequently yawed 30 to 40 degrees to the right at which point the student released the controls. The flight instructor stated that he immediately assumed the controls, verified full throttle and applied full left rudder. He noted that the aircraft settled into ground effect. He reportedly held the plane in ground effect in an attempt to gain airspeed, however, the aircraft subsequently settled in a swamp area beyond the end of the runway. The flight instructor and dual student reported no known malfunction of the aircraft or engine prior to the accident. At 1835, the RRL automated weather observing system recorded winds from 250 degrees at 5 knots, under clear skies.