On June 29, 2012, about 1645 eastern daylight time, a Piper PA-28-140, N449FL, was substantially damaged following a partial loss of engine power and collision with terrain near Lakewood Airport (N12), Lakewood, New Jersey. The certificated airline transport pilot and three passengers were not injured. The airplane was registered to a private individual and was operated by the pilot under the provisions of 14 Code of Federal Regulations Part 91 as a personal flight. Visual meteorological conditions prevailed and no flight plan was filed. The local flight originated at N12 about 1630. The pilot reported that he was taking three children for a ride in the airplane. He reported a gross takeoff weight of 1,987 pounds with a maximum allowable takeoff weight of 2,150 pounds. The first two takeoffs were uneventful. During the initial climb after the third takeoff, he observed a loss of engine performance and the airplane would not maintain the proper climb speed. Unable to continue the climb, he set up for a forced landing past the departure end of the runway. Just prior to ground contact, he pulled the mixture control and turned off the master switch. The airplane struck trees and a fence, resulting in substantial damage to the fuselage and both wings. A Federal Aviation Administration inspector responded to the accident site and examined the wreckage. The inspector confirmed substantial damage to the wings and fuselage. Flight control continuity was established from the cockpit controls to all flight control surfaces. The wreckage was recovered to a local maintenance facility where a subsequent examination of the engine was performed. The magnetos were turned and produced spark at each spark plug lead. Fuel was present in the fuel gascolator. The engine crankshaft was turned manually to check for cylinder compression. The numbers 1, 3, and 4 cylinders produced 68, 74, and 79 pounds per square inch (psi) of compression, respectively. The number two cylinder would only produce 16 psi. Other than some oil leaking from the cylinder when the lower spark plug was removed, there were no other anomalies noted with the cylinder. The FAA inspector reported that the number 4 cylinder was replaced in March, 2012, at the last annual inspection, due to low compression. At that time, the number 2 cylinder produced 75 psi compression. At the time of the accident, the engine total time was 3,571 hours, and 1,276 hours since the last major overhaul. Following the examination by the FAA inspector, a test run on the engine was performed by a certificated airframe and powerplant mechanic with inspection authorization. The engine was started several times and all engine parameters were normal. The engine ran normally using the engine driven fuel pump. The electric fuel boost pump operated when energized by a battery. Both magneto checks were satisfactory. Oil pressure was observed inside the green arc. After the engine was warmed up, a compression check was accomplished and all cylinders showed normal compression.