On June 12, 2005, about 1053 eastern daylight time, an experimental, Michael D. Highsmith, Fergy FII B, N456MH, registered to and operated by a private individual, impacted a power line during a forced landing following loss of engine power near Chipley, Florida. Visual meteorological conditions prevailed at the time and no flight plan was filed for the Title 14 CFR Part 91 personal flight. The private-rated pilot and passenger received serious injuries, and the experimental airplane incurred substantial damage. The flight was originating at the time from the Crystal Village Airport, Wausau, Florida. The pilot stated that no defects were noted during the preflight and run-up. During the takeoff climb from runway 21, a published 3,500 foot long by 75 feet wide runway, the engine's RPM were "slightly below normal", when they where at about 200 feet above ground level. He confirmed the throttle position and then initiated a left turn. At this time the RPM began to gradually decrease as he selected a clearing in an easement for a forced landing next to electrical power lines and trees. The airplane impacted the power lines and struck a tree with the left wing as the airplane descended. The airplane impacted the ground nose first. The passenger stated he was interested in the cost and the difficulty to build the accident type airplane. The pilot asked if he would like a ride and the passenger accepted. The passenger further stated that he did not see the pilot perform a preflight inspection of the airplane prior to departure from the airport. When the airplane was about 250 feet above ground level the airplane changed direction 180 degrees, turned slightly to the left, then back to the right. At that point he was informed about an engine problem from the pilot. The airplane then impacted a tree with the left wing, which spun the airplane around 180 degrees. Several witnesses stated to a representative of the Washington County Sheriff's Office that the airplane appeared to be out of control and was trying to land. The representative stated that a pine tree was noted with the top section missing and a phone line was scraped. Fifteen feet north of the scraped power line, it was frayed. A loss of electrical power to the residents occurred in the immediate area after the accident was reported. The FAA inspector, that conducted the post-accident examination, stated that flight control continuity was established and no discrepancy was noted. A cursory check of the engine was accomplished. Fuel was present in the fuel system and no defects were noted during the examination of the fuel system and fuel. The pilot stated that during the post accident engine tear down examination that he performed, he found markings on the rear cylinder consistent with the piston seizing during operation. The aluminum piston had scoring marks from the top to the bottom of the piston. The cylinder walls had light markings as well. A possible over heat or fuel contamination could have caused the seizing. He found brown powder in the fuel tank after draining and allowing the tank to dry out. He spoke with a Rotax authorized service facility, which informed he of reported cases of seized cylinder for undetermined reason and once the engine cool down the piston was able to move freely up and down in the cylinder with normal compression check afterwards.