Narrative:

After takeoff and leveloff at 3000 ft MSL as directed, departure told us the altimeter setting again and advised of traffic above our position. Instructor pilot realized at this point we had failed to set altimeter correctly. Adjusting it showed us at 3400 ft MSL. Crew coordination and an instructor pilot who allowed himself to be overtasked was the cause. Instructor pilot should have reviewed all pretkof procedures correctly (not the student's way) at the hold short.

Google
 

Original NASA ASRS Text

Title: MIL PLTS ON A TRAINING MISSION OVERSHOT CLB ALT AFTER DEP DUE TO THE WRONG ALTIMETER SETTING.

Narrative: AFTER TKOF AND LEVELOFF AT 3000 FT MSL AS DIRECTED, DEP TOLD US THE ALTIMETER SETTING AGAIN AND ADVISED OF TFC ABOVE OUR POS. INSTRUCTOR PLT REALIZED AT THIS POINT WE HAD FAILED TO SET ALTIMETER CORRECTLY. ADJUSTING IT SHOWED US AT 3400 FT MSL. CREW COORD AND AN INSTRUCTOR PLT WHO ALLOWED HIMSELF TO BE OVERTASKED WAS THE CAUSE. INSTRUCTOR PLT SHOULD HAVE REVIEWED ALL PRETKOF PROCS CORRECTLY (NOT THE STUDENT'S WAY) AT THE HOLD SHORT.

Data retrieved from NASA's ASRS site as of July 2007 and automatically converted to unabbreviated mixed upper/lowercase text. This report is for informational purposes with no guarantee of accuracy. See NASA's ASRS site for official report.