On March 7, 2005, about 1300 eastern standard time, a Piper PA-24-260, N9446P, registered to and operated by a private individual, as a Title 14 CFR Part 91 maintenance test flight, crashed in a swampy area on the shoreline of the New Found Harbor Lagoon, during a return to the airport after takeoff, at the Merritt Island Airport, Merritt Island , Florida. Visual meteorological conditions prevailed and no flight plan was filed. The airline transport-rated pilot received no injuries, and the airplane incurred substantial damage. The flight was originating at the time. The owner/pilot mechanic stated the purpose of the flight was for a maintenance test flight of a newly overhauled engine, which he performed. It was a normal power takeoff, departing from runway 11, and at approximately 300 feet of altitude, the engine slowly started losing power. He elected to return to the airport by turning towards the left. During the return to airport maneuver, he switched the fuel selector from the left tank to right tank, and then back to left tank. The partial loss of power did not correct. He could not maintain altitude and impacted with the swampy terrain, on the west side of the lagoon. The owner/pilot mechanic added the airplane had been sitting in the hanger for about 6 weeks awaiting the overhauled engine, which included new ECI cylinders and crankcase shaft. The fuel system was overhauled about one year before. He performed two ground run up checks to the engine to about 2,200 rpms. He did not note any discrepancies during those checks. He had about 60 to 70 gallons of fuel on board. He did not refuel before the accident flight. He noted, during the accident flight, the fuel flow indicator went from 28 to 17. After the recovery of the accident airplane an engine examination was conducted by the owner/pilot mechanic and a representative of New Piper Aircraft with FAA oversight. During the fuel flow test, the electrical fuel pump was energized; the fuel out line at the fuel servo supplying fuel to the flow divider was observed spraying fuel and the B-nut was found loose. The fuel flow test was stopped. The line's B-nut was tightened and the test resumed. The fuel mixture test noted a mixture rich fuel flow of approximately 7 gallons an hour while mixture lean noted a fuel flow of approximately 4 gallons an hour. A review of the accident airplane's maintenance log book pages provided by the owner/pilot mechanic documents the overhauled engine was installed on March 6, 2005. "The engine was removed and reinstalled after complete overhaul, new shock mounts installed, engine ground run with no defects and all operations normal. Work completed per Lycoming O/H # 60294-7" (Textron Lycoming, Part number 60294-7, Overhaul Manual for Direct Drive Engine). Textron Lycoming, Service Instruction No. 1427B, outlines for the overhauled engine to have a ground run check up to full-static recommended power for a period of no more then 10 seconds. The full-static power for the accident airplane as per the airplane's flight manual is 2,700 rpm, with turbocharger control off. After operating the engine at full power, allow for cooling, check idle mixture and shutdown. The Piper PA-24-260, Comanche, Service Manual, 7A-33, details the procedures for engine installation, including cautions and warning pertaining to fluid leaks on the airframe components.