On March 4, 2008, about 1030 Alaska standard time, a ski-equipped Piper PA-18-150 airplane, N985W, sustained substantial damage following a loss of control and impact with trees and a building during takeoff initial climb, about 41 miles southeast of Nikolai, Alaska. The airplane was being operated by Alaska Cub Training Specialist LLC, Palmer, Alaska, as a visual flight rules (VFR) instructional flight under Title 14, CFR Part 91, when the accident occurred. The commercial certificated flight instructor, and the private certificated student pilot, were not injured. Visual meteorological conditions prevailed, and no flight plan was filed. The airplane was departing on a frozen lake. In a written statement dated March 25, the student pilot wrote that he had contracted with Alaska Cub Training Specialist to provide wilderness flight training, while following the Iditarod sled dog race. He reported that they had not flown for several days due to high winds, and that on the morning of the accident, the wind was still high and gusting. He stated he and his instructor were the lead airplane in a flight of three, and that due to the sun and wind, most of the snow was gone from the lake's surface, and the takeoff area was mostly glare ice. He said the other two airplanes taxied out first, and both lost control, and spun into the wind due to gusting conditions. He said since the other airplanes were having trouble maintaining control while taxiing, his instructor told him to taxi to the center of the lake. He said he suggested taxiing farther down the lake to give them more takeoff length, but the instructor said no. The student said he was on the controls, and pointed the airplane toward the lowest point in the hills surrounding the lake. The lowest point was also the location of the lodge. When he reached flying speed, he pulled in full flaps as instructed, and after becoming airborne, the airplane settled back to the surface, and then began to climb. He said as they approached the hills, the climb rate declined as they encountered gusts and downdrafts. He reported that the instructor took the controls, and as they approached the rising terrain, he asked if he should reduce the flaps, which were full down. The instructor said no, and began a left turn to avoid hitting the lodge. He said the airplane settled into the trees, and collided with the wash house. He stated that the airplane sustained damage to the fuselage and both wings.