On August 27, 2010, at about 1450 eastern daylight time, a Champion Aeronca, 7HC, N8919R, owned and operated by a private individual, incurred substantial damaged during a force landing following a loss of engine power near the Blue Lick Airport (07KY), Louisville, Kentucky. The certified flight instructor (CFI) and the student pilot were not injured. Visual meteorological conditions prevailed for the Title 14 Code of Federal Regulations Part 91, instructional flight. The owner/student pilot stated that the airplane went through a restoration process. The wings were removed for repairs, new fabric work, and the carburetor was overhaul by a Federal Aviation Administration (FAA) approved repair facility and reinstalled upon its return in June of 2009. The airplane’s paint job was completed around November of 2009. The airplane’s engine was initially started at that time. Since then, it was estimated the engine had about 2 hours of ground runs prior to the accident. The owner/student pilot stated that about 3 weeks prior to the accident, he had taxied and performed engine ground runs to get familiarized with the airplane and to check it out before starting the tail wheel instructional training. The CFI stated that earlier in the day he and the student flew once in the pattern so he could get a feel of the airplane and commented that the airplane’s performance was unremarkable. They landed taxied to the fix base operator and parked the airplane. They disembarked and went in to start ground school. After lunch they return to the airplane for the actual flight training; once again, the student in the front and the CFI in the back seat. The preflight and ground run up checks were unremarkable. The student was at the controls at takeoff and started a right bank at an estimated altitude of 800 feet above the ground when they were surprised by the sudden loss of total engine power. The CFI took over the controls and elected to land in an open field within a residential area. The airplane’s right wing impacted with a street stop sign and a phone cable box. Both main landing gear bent and separated aft before the airplane came to a stop in the open field. The responding FAA inspector stated that a post recovery examination of the airplane revealed about 16 gallons of aviation fuel in the tanks. Fuel was observed up to the carburetor system. All cylinders had compression when checked and sparks were noted at the spark plugs during propeller rotation. A post recovery engine run was performed. The engine started and produced power. After the engine run, the carburetor was removed and was partially disassembled. One of the floats was observed with a noticeable hole (perforated) at the lowest point of the float. The carburetor was sent to the National Transportation Safety Board Materials Laboratory for metallurgical examination. The dimensions of the perforation were 0.14 inch long and 0.09 inch in width. The region surrounding the perforation exhibited surface features such as pits and roughening consistent with a chemical etching reaction, similar to corrosion. The location of the perforation and surrounding etched areas on the float were consistent with a small quantity of liquid, which was corrosive to brass, remained retained in the bottom of the carburetor bowl a sufficient time for the chemical reaction. The corrosion progressed to the point the float’s skin disintegrated, creating the perforation. Review of the carburetor overhaul documentation revealed the float was reused and was not required to be replaced at that time. The overhaul facility returns the newly overhaul carburetors dry; without any preservative treatment.