On October 23, 2008, about 1415 mountain standard time, a Cessna 172A, N7822T, experienced a total loss of engine power during initial climb from the Sarita Airport, located about 4 miles southeast of Coolidge, Arizona. The pilot reversed course and, during a forced landing, the airplane impacted the side of a ditch short of the runway. The commercial certificated pilot and passenger received minor injuries, and the airplane was substantially damaged. The pilot owned, operated, and maintained the airplane. Visual meteorological conditions prevailed, and no flight plan was filed. The flight was performed under the provisions of 14 Code of Federal Regulations Part 91, and it was originating at the time of the accident. The pilot reported to the National Transportation Safety Board investigator that no mechanical problems or airplane anomalies were observed during his preflight inspection. Also, the engine operated normally during the pretakeoff run-up. The accident occurred following takeoff from runway 17 at the uncontrolled airport. Upon climbing about 300 feet above ground level, the engine suddenly lost all power. The event was not precipitated by any unusual vibration, backfiring or missing, and the propeller started windmilling. There were at least 10 gallons of fuel in each wing tank. The pilot reported to the Safety Board investigator that he immediately repositioned the fuel selector to draw fuel from the opposite wing tank and reversed his direction of flight. However, there was insufficient altitude to return to the airport. Engine power was not restored following his repositioning of the fuel selector. During the impact sequence a wing broke, the windshield cracked, the firewall buckled, and cabin floor bulkheads bent. The pilot stated that he held a Federal Aviation Administration (FAA) airframe and powerplant mechanic certificate. The airplane was equipped with a Franklyn engine, which he had installed. The pilot stated that he had performed the last annual inspection of his airplane, and he was responsible for its maintenance. A FAA inspector from the Scottsdale Flight Standards District Office subsequently examined the airplane. The inspector reported to the Safety Board investigator finding "copious amounts of water in the fuel strainer, and evidence of water in the carburetor." The inspector also reported, in part, observing other discrepancies including frayed electrical cords in the cockpit, missing placards, a finger tight fuel line, and hornets' nests in the empennage and the horizontal stabilizer.