It was the student's fourth flying lesson and the effects of power were being revised. The student turned the aircraft 90 degrees to the left onto downwind but when he attempted to level the wings after the turn, the bank angle increased from about 30 to 50 degrees. The instructor took over the controls and attempted to recover by applying right aileron, full power and holding the nose up briefly. When the aircraft did not immediately recover, the instructor lowered the nose but the aircraft struck the ground, in a left wing, nose low attitude, before full control could be regained. After revising the effects of power, the engine speed was set too low for the aircraft to sustain a level turn. The student maintained altitude by progressively applying up elevator and the instructor did not notice the incorrect setting because speed was assessed with reference to the ground in a 20 knot tailwind. The instructor delayed taking over the controls, because he thought that the aircraft was being subjected to mechanical turbulence generated by trees, over which they had flown.