The pilot and pilot-rated passenger had just departed and planned to depart the airport area. During the initial takeoff climb, the pilot-rated passenger reported to air traffic control that she had a “fuel issue/problem” and was going to return to the airport. A witness stated that the engine made a loud "pop pop" sound followed by a decrease in engine power. A few seconds later, the witness heard the engine power increase again. According to the air traffic controller, the airplane’s left bank continued to increase, and he cleared the airplane to land on any runway. The airplane subsequently impacted terrain in a nose-low attitude. Postaccident examination of the airplane revealed that the left wing contained about one gallon of fuel and about 6 oz of water. The source of the water could not be determined. No other anomalies were noted with the airframe. Examination and a functional test of the engine did not reveal any anomalies that would have precluded normal operation. It is likely that the engine lost power shortly after takeoff due to the water contamination found in the fuel tank. It is also likely that during the steep bank turn towards the airport, the pilot allowed the airplane to exceed the critical angle of attack which resulted in an aerodynamic stall and subsequent impact with the ground. Based on the toxicology results, it is likely that the pilot had taken the sedating prescription medication clonazepam. Clonazepam is used to treat seizure disorder and panic disorder. The inactive metabolite was detected in blood and urine suggesting the use of the medication occurred several days before the accident. Given the lack of the active compound it is unlikely the pilot’s use of clonazepam contribute to this accident. Ethanol was detected in the pilot’s blood, but not in his urine. It is likely that the identified ethanol was from sources other than ingestion and did not contribute to this accident.