On September 15, 1993, at 1230 hours Pacific daylight time, a Hughes 369D, N501RR, collided with trees after a loss of engine power in mountainous terrain about 12 miles east of Georgetown, California. The helicopter was being operated by Erickson Air Crane, Inc., Central Point, Oregon, as an external load flight under 14 CFR Part 133. The helicopter sustained substantial damage. The certificated airline transport pilot was not injured. Visual meteorological conditions prevailed at the time and a company VFR flight plan was filed. The flight originated from a field site about three minutes before the accident. The aircraft was on a logging support mission. The aircraft had landed at a landing site where 100 pounds of fuel were added to bring the fuel load to 250 pounds. The aircraft was started up and a load of logging chokers were taken to the target site in a nearby canyon. The aircraft then returned to the log landing site, picked up a second load of logging chokers, then returned to the intended drop site. The pilot reported that he had stabilized in a hover approximately 500 feet AGL and 100 ft. from the drop point. At this time, all readings were reported as normal. The pilot reported he started to move the aircraft forward when it went into a "violent vertical descent". The main rotor blades contacted a tree and the aircraft fell to the ground. An unsuccessful attempt was made to jettison the external load. The aircraft came to rest on sloping terrain about 3,400 feet mean sea level (MSL). After the accident, the pilot secured the cockpit before exiting the helicopter unaided. The pilot reported the engine was not running after the helicopter came to rest. He reported he shut the throttle off, pulled the fuel shut-off valve closed, switched the battery off, and pulled the "engine out" circuit breaker. The pilot also reported he observed the engine out light as aircraft fell through the trees. The pilot also reported that the pressure altitude at the time of the accident was 3,600 feet MSL and the temperature was 16 degrees Centigrade. According to the operator, a Bell 206 helicopter replaced the Hughes 369D to haul the log chokers. The Bell 206 pilot also experienced a settling in the same location as the Hughes 369D pilot. The Bell 206 pilot jettisoned the load and flew out of the settling. The helicopter wreckage was recovered and taken to the operator's facilities in Oregon. The helicopter's engine was examined by the engine manufacturer's representative while being observed by the airframe manufacturer's representative and the helicopter operator. According to the engine manufacturer, the engine did not appear to have suffered any damage. No oil leaks were noted. Both the gas producer and power turbines were free to rotate. Fuel samples were taken in several places and appeared clean with no water. A vacuum check of the fuel system did not reveal any leaks. The engine was then shipped to National Airmotive Corporation, Oakland, California, for functional testing in an engine test cell. According Allison Gas Turbine Company, the test cell data did not disclose any evidence of a mechanical failure or malfunction with the engine or any of its accessories. The engine met or exceeded all performance specifications and passed the vibration tests. The "Basic Helicopter Handbook", published by the FAA, details information concerning helicopter aerodynamics and performance. The handbook defines settling with power "as settling in your own downwash." The handbook also states in part; settling with power "involves high vertical rates of descent, and the addition of more power produces a greater rate of descent." The handbook indicates the following combination of conditions are likely to cause settling with power: 1. "A vertical or nearly vertical descent of at least 300 feet per minute. Actual critical rate depends on the gross weight, RPM, density altitude, and other pertinent factors." 2. "The rotor system must be using some of the available engine power (from 20 to 100 percent)." 3. "The horizontal velocity must be no greater than approximately 10 miles per hour." The handbook further states, "A pilot may experience settling with power accidentally. Situations that are conducive to settling-with-power condition are:" 1. "Attempting to hover out of ground effect at altitudes above the hovering ceiling of the helicopter;" 2. "Attempting to hover out of ground effect without maintaining precise altitude control; or" 3. "A steep power approach in which airspeed is permitted to drop nearly to zero." According to the helicopter manufacturer, the out of ground effect hover ceiling for the Hughes 369D is about 7,500 feet MSL on a standard temperature day (15 degrees C).