On July 19, 2006, about 0720 Atlantic standard time, a Douglas DC-3, N782T, registered to and operated by MBD Corporation, ditched in the Caribbean Sea shortly after takeoff from the Cyril King, Charlotte Amalie Airport, Saint Thomas, Untied States Virgin Island, while on a Title 14 Code of Federal Regulations Part 91 positioning flight. Visual meteorological conditions prevailed at the time and a company flight plan was filed. The airline transport-rated pilot, commercial-rated copilot and one of the two passengers were not injured; the other passenger received minor injuries. The airplane incurred substantial damage. The flight was originating at the time. The air traffic controller at the departing airport stated he cleared the airplane for takeoff from runway 28. He observed the airplane airborne by just short of mid field. He then he observed the airplane turn slightly left of the runway heading followed by a turn back to the runway heading. Once the airplane reached the departure end of the runway, a flight crew member communicated that they needed to return and land due to an engine failure. They were cleared to land on either runway. The controller observed the airplane losing altitude and realizing the airplane would not make runway 28, he advised them to land on runway 10. Shortly after that he observed the airplane ditch about a mile away from the departure end of runway 28. The controller started the rescue coordination at that time. The captain stated the accident flight was a return flight to San Juan, Puerto Rico, after delivering U.S. Mail. The airplane was empty of cargo at the time of the accident. The first officer was flying the airplane. The takeoff roll and rotation at 84 knots was uneventful until about 100 feet above the ground when the gear was called out to be retracted. At that time, the left engine's rpm dropped from 2,700 to 1,000. He communicated to the first officer that he would be assuming control of the airplane. He then proceeded with verifying that the left engine had failed. Once confirmed, he proceeded with the failed engine check list and feathering the propeller. They advised ATC of the situation and informed them that they were retuning to land. The airplane would not maintain altitude and the airspeed dropped to about 75 knots. The captain knew the airplane would not make it back to the airport. Instructions were given to the two passengers to don their life vests and prepared for a ditching. The captain elected to perform a control flight into the water. All onboard managed to exit the airplane through the cockpit overhead escape hatch onto the life raft as the airplane remained afloat. About ten minutes later the airplane went nose first straight down. The airplane came to rest at the bottom of the ocean, in about 100 feet of water. The airplane was not recovered. Underwater photos provided by the operator showed the nose and cockpit area caved in, the left engine's propeller was in the feathered position, and the right engine's propeller was in a low pitch position.