On May 18, 2006, about 0850 eastern daylight time, a Mooney M20G, N12RH, impacted the ground following a loss of control subsequent to a loss of engine power during takeoff initial climb from Palm Beach County Park Airport, Lantana, Florida. The airplane was registered to and operated by the pilot. Visual meteorological conditions prevailed, and an instrument flight rules flight plan was filed for the 14 Code of Federal Regulations Part 91 personal flight. The private pilot and the passenger received serious injuries and the airplane incurred substantial damage. The flight was originating at the time of the accident, and the intended destination was Exuma Island, Bahamas. A witness reported that he observed the airplane depart on runway 33 and climb to an altitude of 50 to 100 feet above the runway. Then the airplane appeared to stall and shudder at which time the left wing dropped. The airplane began to turn left and descended until it hit the ground. The FAA inspector who responded to the accident scene stated that witnesses told him that the airplane incurred a loss of engine power about 100 feet above the ground during takeoff from runway 33. The inspector further stated that the witnesses saw the airplane stall and descend to ground impact. The inspector added that the pilot's wife, who was a passenger in the airplane, stated that there was an alarm that sounded in the cockpit, and then they immediately started descending and struck the ground. During examination of the airplane, the FAA inspector found the fuel selector in the off position. A witness, who had assisted the pilot in exiting the airplane after the impact, reported that he found the fuel selector in the left tank position and moved it to the off position. The FAA inspector removed the left and right wing fuel tank caps and observed that the tanks were full of fuel. He noted that the left fuel cap o-ring was severely dry rotted and had several cracks. Fuel was drained from the right wing sump drain; the fuel drained freely, and no contamination was noted. Fuel was drained from the left wing sump drain; the fuel did not flow freely, only a few ounces were obtained, and the fuel was contaminated with water. In order to obtain a larger sample of fuel from the left wing, the carburetor was removed, a bucket was placed under the fuel line to the carburetor, and the fuel selector was placed in the left tank position. The aircraft battery was used to power the aircraft's fuel boost pump, and approximately 1 gallon of fuel was obtained. The fuel sample was cloudy and contained a significant amount of water. The carburetor was partially disassembled, and the bowl was found contaminated with approximately 50% water. The FAA inspector interviewed personnel at the airport's fixed base operation and discovered that the airplane had arrived at the airport on May 9. It was parked outside on the ramp from that date until the day of the accident. During this time period, there had been a significant amount of rainfall. The airplane was fueled on May 17 with 22.2 gallons of 100LL aviation fuel. No other aircraft that received fuel from the same fuel truck reported any problems with water contamination.