On July 18, 2008, at 1016 Eastern daylight time, an experimental light sport airplane (E-LSA) Sport Flight Talon XP, N1856P, lost engine power during takeoff from the Inverness Airport, Inverness, Florida. The sport pilot flight instructor was operating the airplane under the provisions of 14 Code of Federal Regulations Part 91. The instructor was not injured and the student sustained serious injuries. The airplane was substantially damaged. Visual meteorological conditions prevailed and no flight plan was filed for the local area instructional flight. According to the instructor, the airplane had been converted from an ultralight trainer to an E-LSA in January of 2008. Approximately 1 minute into the accident flight at 600 feet above ground level (agl), the engine sputtered. The engine completely lost power as the instructor attempted to return the airplane to the runway. The airplane impacted trees prior to reaching the runway. The engine was examined by a Federal Aviation Administration inspector and a representative of Rotax engines. The examination revealed that the lower rod bearing was corroded and had failed. Near the area of the failure, there was a crack identified in the crankcase. The engine was manufactured in 1994 and sold in 1995 to the first user. The engine had been purchased by the owner as "rebuilt" in November of 2007, however, no supporting documentation was available for the engine. The engine manufacturer also specifies that the crankshaft should be replaced every 5 years. There was no evidence that the crankshaft had been replaced since the date of manufacture.