On September 7, 2006, about 1445 central daylight time, a single-engine Morton Mustang II experimental airplane, N696DM, was substantially damaged during a forced landing following a loss of engine power shortly after takeoff from the Lone Star Executive Airport (CXO), near Conroe, Texas. The commercial pilot and pilot-rated passenger were not injured. The airplane was registered to an individual and was operated by the pilot. Visual meteorological conditions prevailed for the personal flight and no flight plan was filed for the 14 Code of Federal Regulations Part 91 local flight. According to the 33,000-hour pilot, after the eighth takeoff of the day, the engine on the tail-wheel equipped airplane experienced a complete loss of power while on the crosswind leg of the traffic pattern. The pilot elected to land on a nearby small grassy field. Just prior to touchdown, the airplane's main landing gear and both wing leading edges impacted an 8-foot high fence. During the landing rollout the main landing gear collapsed and the airplane came to rest in an upright position. Both pilots were able to exit the airplane unassisted. According to a Federal Aviation Administration inspector, who examined the airplane following the accident, both wings sustained structural damage. The inspector further reported that the airplane's fuel header tank contained approximately 10-12 gallons of fuel. An airframe and powerplant mechanic (A&P), under the direction of the NTSB investigator-in-charge (IIC), examined the 150-horsepower Lycoming O-320-E2A engine. According to the mechanic, cylinder compressions were 75/80 or higher. The oil filter was cut open and examined. No abnormal metal particles were observed in the oil filter element. Valve train and accessory gear continuity was established. The right magneto was found to have failed internally; however, the left magneto was still operational. According to the mechanic, no anomalies were noted during the examination that would have prevented normal engine operation.