On July 8, 2010, about 1340 Pacific daylight time, a Douglas A4L, N132AT, collided with terrain after the pilot ejected following a loss of engine power on takeoff from Fallon Naval Air Station, Fallon, Nevada. Airborne Tactical Advantage Company (ATAC) was operating the airplane under the provisions of 14 Code of Federal Regulations (CFR) Part 91 on a local public-use flight. The airline transport pilot sustained minor injuries. The airplane sustained substantial damage by impact forces and post crash fire. Visual meteorological conditions prevailed, and no flight plan had been filed. The operator reported that the takeoff and gear and flap retraction were normal. The pilot started a right turn for departure from the airport traffic area during the initial climb when the engine lost power. He reversed his turn, and attempted to land on the runway in the opposite direction of the takeoff. The airplane was too low and slow, so he steered the airplane in the direction of an empty field and successfully ejected. The airplane exploded on impact. The operator reported that their examination of the engine determined that the protective coating on the turbine blades and stators had degraded. This degradation led to the eventual failure of the stator vanes and then the turbine blades. They could not establish the exact reason for the degradation of the protective coating. The operator listed several contributing factors. They were unaware of a requirement to down trim the engines to a maximum of 102 percent until an associated technical change had been complied with. The airplane had a modified electrical start system that resulted in starts that approached the flight manual time and temperature maximum limits. During the post accident exam, they discovered a broken fuel tube due to fatigue in the combustion chamber at the 11 o'clock position. The operator believes that none of the contributing conditions caused the engine problem. However, they stated that the combination of the three led to the degradation of the protective coatings on the stators and blades in the turbine section, and ultimately the failure of the turbine blades.