On August 3, 2016, about 1155 central daylight time, a Sonex Limited Waiex airplane, N12YX, impacted terrain following a partial loss of engine power near the Fond du Lac County Airport (FLD), Fond du Lac, Wisconsin. The private rated pilot and flight instructor were both seriously injured. The airplane was substantially damaged. The airplane was registered to and operated by Sonex Ltd under the provisions of 14 Code of Federal Regulations Part 91 as a personal flight. Visual meteorological conditions prevailed for the light, which operated without a flight plan. The airplane was departing FLD at the time of the accident.According to information provided by the flight instructor, the pilots were performing takeoffs and landing on runway 27 at FLD. Shortly after takeoff, when the airplane was between 200 to 300 ft above ground level, they heard a sudden change in the engine noise. The instructor observed that the engine rpm was between 2,500 to 2,600 rpm, when the engine was previously performing about 3,100 rpm. The instructor took control of the airplane and began an immediate left turn for runway 15. The airplane would not maintain altitude, so he momentarily leaned the mixture which did not improve engine performance, so he returned the mixture to full rich, and performed a forced landing to a field. The airplane collided with an unseen transmission line and impacted terrain. A postaccident examination of the airplane revealed substantial damage to the fuselage and both wings. An examination of the engine was conducted at Sonex under the auspices of the Federal Aviation Administration. A compression check of the engine found low compression of the number 1 and 2 cylinders. Examination of the exhaust valves found they displayed excessive wear.