On September 3, 2007, about 1830 mountain standard time, a Kearney Pulsar XP, N137GK, encountered a ditch during a forced landing following a loss of engine power during the takeoff initial climb from runway 14 at Cottonwood Airport, Cottonwood, Arizona. The airline transport pilot, the sole occupant, was not injured, and the airplane sustained substantial damage. The pilot was operating the airplane as a 14 CFR Part 91 personal flight. Visual meteorological conditions prevailed, and no flight plan was filed for the planned local flight.

According to the pilot, the airplane was climbing through 300 feet with an airspeed of about 80 mph, when the engine began to run "very rough" and lose power. The power decayed to idle, although the engine continued to run. The pilot executed a forced landing straight ahead, and during the ground roll, the airplane encountered a ditch. The canopy separated and both main landing gear struts were broken. Oil was dripping from the lower cowling and from inside of the left exhaust. The airplane's belly, left gear strut and left wing root were covered in oil.

On November 13, 2007, the airplane was examined under the supervision of the NTSB investigator-in-charge at the facilities of Air Transport in Phoenix, Arizona. The wings had been removed from the airplane by recovery personnel. Cracks were noted in the fiberglass structure of the right wing root rib and in the fuselage floor at the right landing gear attach point. The engine mount was bent, and all three propeller blades had separated from the hub. The coolant tank was found empty, and the oil tank contained oil at a level on the dipstick below the stick markings. Both carburetor bowls were removed, and residual automotive fuel was found in the bowls. No water was noted; however, there were brown particles floating in the fuel. The carburetor bowls were reinstalled.

The damaged propeller was removed from the engine, and a fuel supply was attached to the left fuel line at the wing root. Using the aircraft electrical system, the fuel boost pump was energized and fuel flowed to the engine. The engine was started and run at idle power. The left and right ignition systems were checked. No discrepancies were noted.

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