On July 2, 2008, about 0700 central daylight time, a Smith Aerostar 601P, N601TS, piloted by an airline transport pilot, sustained substantial damage during a forced landing following a loss of engine power on takeoff from the Chandler Field Airport, Alexandria, Minnesota. The 14 CFR Part 91 business flight was operating in visual meteorological conditions on an instrument flight rules flight plan. There were no injuries reported to the pilot or three passengers. The flight was originating at the time of the accident and Saint Louis, Missouri, was the intended destination. The pilot reported that on the previous flight the left engine experienced surging at 14,700 feet and the flight could not be conducted at the expected altitude of 19,000 feet. He stated that during descent the engines performed normally at lower altitudes. After landing, he talked with a mechanic on the telephone and a decision was made to conduct the next leg of the trip at a lower altitude. He stated that during the takeoff, as he rotated, he noticed that the airplane's performance was less than usual. He determined that insufficient runway remained to abort the takeoff and he elected to continue and return to the airport. He stated that he was unable to determine which engine was the reason for the power loss. He stated that he was unable to climb higher than 150 feet above the ground or to accelerate beyond 110 miles per hour. The pilot reported that while attempting to turn back to the airport he lost speed and decided to turn the airplane away from the populated areas and land in a field that was southeast of the airport. He reported that he touched down on level terrain, but the airplane subsequently struck a drainage ditch during the landing. Both engines were Lycoming model IO-540-S1A5 engines and each had 4,316.5 hours total time in service. The most recent overhaul of the engines was performed on July 1, 1994, and each engine had accumulated 458 hours since that overhaul. The airplane was examined subsequent to the accident. Both engines were rotated by hand and "thumb" compression was evident. Fuel was found in the fuel lines leading to the fuel servos and to the fuel manifolds. Fuel was found within the airplane's fuel tanks. Magneto timing was checked and was found to be within specifications. Examination did not reveal any defects that would have resulted in a loss of engine power.