On July 6, 2007, about 1604 eastern daylight time, a Cessna 177RG airplane, N52650, sustained substantial damage when it collided with terrain following a loss of engine power during takeoff-initial climb from the Spitfire Aerodrome, Pedricktown, New Jersey. The airplane was being operated as a visual flight rules (VFR) cross-county flight under Title 14, CFR Part 91, when the accident occurred. The first pilot, a certificated airline transport pilot seated in the right seat, and the second pilot, a certificated private pilot seated in the left seat, were not injured. The second pilot was the airplane owner. Visual meteorological conditions prevailed, and no flight plan was filed. The flight originated at the accident airport about 1604, with a destination of Angleton/Lake Jackson, Texas. During a telephone conversation with the National Transportation Safety Board (NTSB) investigator-in-charge (IIC) on July 10, the first pilot reported that the second pilot had purchased the accident airplane about 2 hours before the accident, and the purpose of the flight was to ferry the airplane to the second pilot's home airport in Texas. He said that the second pilot had no experience in a Cessna 177RG, and since he did not possess the required high performance logbook endorsements, he was asked to fly with the second pilot during the ferry flight to Texas. The first pilot reported that just prior to departure, both of the airplane's fuel tanks were filled to capacity, which required about 14 gallons of additional fuel. He added that during the preflight inspection of the accident airplane, he obtained fuel samples from the airplane's 5 fuel sump drain ports. According to the first pilot, none of the fuel samples contained contaminates or water. The first pilot reported that the second pilot was flying the airplane during the initial phase of the takeoff. He said that just after takeoff, about 500 feet agl, all engine power was lost. The first pilot said that he then took control of the airplane in an attempt to re-establish engine power, but emergency engine procedures did not restore engine power, and he selected a forced landing area in an open field. During the emergency landing the airplane collided with rough and uneven terrain, and sustained substantial damage to the wings, fuselage, and empennage. A Federal Aviation Administration (FAA) operations inspector, Philadelphia Flight Standards District Office (FSDO), examined the airplane at the accident scene on the accident date. He reported that the airplane came to rest upright, and that both wing-mounted fuel tanks were intact. The FAA inspector said that he drained about 4 ounces of water from the airplane's left fuel tank and gascolator. He noted that the airplane's gascolator contained a sandy, gritty white substance. The airplane was recovered from the accident site and transported to a local salvage facility. On August 2, the FAA inspector who previously examined the accident airplane reported that the fuel injector screen contained trace amounts of rusty-colored water. After reinstallation of the airplane's fuel system components, a clean fuel source was attached to the airplane and the engine was started. The engine produced full power. The FAA inspector reported no further preaccident mechanical anomalies were found during the postaccident inspection. The FAA inspector commented that the airplane had been stored outside, and that heavy rain had been reported in the area 2 or 3 days before the accident. Neither pilot completed an NTSB Pilot/Operator Aircraft Accident Report (NTSB Form 6120.1) as requested.