On August 6, 2005, at 0912 eastern daylight time, a Grumman-Schweizer G-164A airplane, N48395, was substantially damaged during a forced landing after takeoff from the Penn Yan Airport (PEO), Penn Yan, New York. The certificated commercial pilot was not injured. Visual meteorological conditions prevailed for the local agricultural application flight conducted under 14 CFR Part 137. According to the pilot, he had completed two local flights without any abnormalities, and then departed from runway 19, for the third flight of the day. After takeoff, as the pilot turned onto the crosswind leg of the traffic pattern and reduced the power, the engine "went silent." The pilot initiated a descent toward the runway to perform a forced landing. During the landing, the airplane rolled into rough, uneven terrain, resulting in substantial damage to the wings and fuselage. Examination of the radial engine by a Federal Aviation Administration (FAA) inspector revealed the number 3 exhaust valve was fractured. The fractured valve was sent to the Safety Board Materials Laboratory, in Washington, D.C., for further examination. According to the Materials Laboratory Factual Report, examination of the fracture features on the fitting side of the valve revealed features consistent with fatigue. A review of the airplane's maintenance records revealed the engine was last overhauled on March 16, 1998. The engine accumulated approximately 963 hours of operation since the overhaul. Additionally, an entry dated July 30, 2005, revealed a bird's nest was removed from the induction system. The next, and final, entry was dated August 5, 2005, and stated, "tightened throttle quadrant friction nut one turn. Ops check good."