On March 19, 1998, approximately 1630 mountain standard time, a Bell OH-58C helicopter, N505JA, was substantially damaged following a loss of power during takeoff from a 9,060 foot mesa near Dulce, New Mexico. The commercial pilot received minor injuries; however, the single passenger received serious injuries. The helicopter was being operated by the Jicarilla Apache Police of Dulce, New Mexico, under Title 14 CFR Part 91. Visual meteorological conditions prevailed for the public use flight which was originating at the time of the accident. A company VFR flight plan had been filed. According to the pilot, on the morning of the accident, he flew the aircraft 6.1 hours performing a game count with two passengers on board. He reported that at approximately 1430, he departed Dulce Airport (elevation 6,800 feet) with one electrical technician to fly to Archuleta Mesa (elevation 9,060 feet, flight time approximately 10 minutes) to perform maintenance on a transmission antenna. The pilot reported that he experienced no power availability problems during the flight, landing, or subsequent engine shutdown. The pilot stated that "after the technician completed his work, I performed a preflight inspection of the helicopter and strapped myself in." He further stated that during engine start sequence, he noticed a 10 second delay of N1 at 36% rpm; the N1 rpm subsequently "climbed normally." The pilot reported that he performed his "normal" checks in preparation for flight, did a hover check, and backed the aircraft up for departure over trees and wires. The pilot stated that he remembered the helicopter yawing nose left and he attempted to correct with right pedal. He further stated that "the rpm warning light illuminated and the N2 rpm was at approximately 90%." The passenger stated that "as the helicopter cleared the wires, the engine became quiet--total silence, and the helicopter vibration seemed to stop." The pilot said that he autorotated to the steep sloping vegetated terrain, but when "he pulled full up collective, it had no effect." He said the helicopter "violently impacted the ground; rolled forward and to the left." Postimpact inspection of the engine fuel controller revealed that the PC line, which provides pneumatic pressure from the engine governor to the fuel controller, had disconnected from the fuel controller. The engine manufacturer's representative stated that "the PC line disconnect from the fuel controller would result in the engine's power output returning to an engine idle status." The engine was subsequently put on an engine run test stand, the PC line was reconnected, and the engine's performance met overhaul specifications (see attached engine report). The helicopter received its last annual inspection on September 18, 1997, 93 flight hours prior to the accident. The pilot reported that he performed the 25 hour intermediate inspection at approximately every 12.5 hours; the last one was performed the morning of the accident (6,500.9 aircraft total time). The pilot further reported that he had observed a Jicarilla tribal member changing navigation light bulbs on the helicopter; the same individual expressed to the pilot further interest in performing maintenance on the helicopter. The pilot cautioned all personnel at the Dulce Airport not to perform maintenance on the helicopter. High Country Helicopter, the maintenance organization that performed the last annual inspection, did not use torque paint on the PC line B-nut, which is required by the engine manufacturer but not mandated by FARs. The pilot reported that "because of the location of the PC line connection to the fuel controller, it would be difficult, during a normal preflight inspection, to determine if the PC line B-nut was properly torqued or if it was loose." He further reported that "the presence of torque paint on the B-nut is the only way for a pilot to determine if the B-nut meets manufacturer's requirement for a properly torqued B-nut."