During an instructional flight, the flight instructor and pilot receiving instruction took off from a lake and began a normal climb. At a height of about 200 to 300 feet, the engine began losing power, and the flight instructor assumed control of the airplane. As the instructor maneuvered the airplane away from marine traffic, the engine lost power completely. The airplane contacted the water hard, resulting in substantial damage to the left wing strut and fuselage. Postaccident examination of the airplane revealed that the fuel selector was not in the right fuel tank detent. The examination otherwise revealed no evidence of any preimpact mechanical malfunctions or failures of the engine or fuel system that would have precluded normal operation. The engine was later started and test run normally with the right fuel tank selected, and when the valve was positioned slightly out of the right fuel tank detent, the engine began losing power within about 30 seconds. Given this information, it is likely that the pilot inadvertently moved the fuel selector in a position that restricted fuel flow to the engine, which resulted in the loss of engine power during takeoff.