THE CERTIFICATED COMMERCIAL HELICOPTER PILOT WAS ENGAGED IN A SALVAGE OPERATION OF THE WRECKAGE OF A WORLD WAR II F-4U CORSAIR, UTILIZING AN EXTERNAL 50 FOOT LONG LINE. ON THE FOURTH TRIP OF THE DAY, THE RADIAL AIRCRAFT ENGINE WITH PROPELLERS ATTACHED, WAS BEING LIFTED FROM RUGGED MOUNTAINOUS TERRAIN AT 11000 FEET MSL. THE ENGINE WAS POSITIONED AT THE EDGE OF A ROCKY GLACIAL CHUTE THAT DESCENDED AT ABOUT A 45 DEG ANGLE. THE DENSITY ALTITUDE OF 13000 FEET AND THE EXTERNAL LOAD WEIGHT, EXCEEDED THE PERFORMANCE CAPABILITY OF THE HELICOPTER. AS THE HELICOPTER ATTEMPTED TO LIFT THE ENGINE, GROUND PERSONNEL OBSERVED THE HELICOPTER IN A NOSE DOWN ATTITUDE. THE MAIN ROTOR BLADES STRUCK SURROUNDING TERRAIN. THE HELICOPTER AND ENGINE TUMBLED DOWN THE MOUNTAIN SIDE, DISINTEGRATING AS IT DESCENDED ABOUT 1/2 MILE DOWNSLOPE. ONE GROUND CREWMEMBER RECEIVED MINOR INJURIES FROM FLYING DEBRIS. THE PILOT RECEIVED FATAL INJURIES.