THE HELICOPTER WAS HOVERING NEAR THE EDGE OF THE VOLCANICALLY ACTIVE CRATER AT 15 TO 20 FEET ABOVE GROUND LEVEL. THE HELICOPTER WAS HOVERING DOWNWIND OF THE VENT. SEVERAL LOUD POPPING SOUNDS WERE HEARD COMING FROM THE ENGINE AND THE PILOT SENSED A LOSS OF POWER. THE PILOT AUTO ROTATED TO A DOWN SLOPE HARD LANDING AND THE MAIN ROTOR CONTACTED THE TAIL BOOM. AFTER RECOVERY FROM THE ACCIDENT SITE, THE ENGINE WAS EXAMINED WHILE STILL IN PLACE IN THE HELICOPTER. FUEL SAMPLES WERE REMOVED FROM THE TANK AND SUMP, AND FOUND TO BE CLEAR. ALL PC AIR LINES WERE PRESSURE CHECKED, WITH A SMALL LEAK DETECTED ON THE INLET SIDE OF THE PC FILTER. THE ENGINE WAS STARTED AND TEST RUN IN THE AIRFRAME UP TO 72% N1, WITH NO ADVERSE FINDINGS. THE ENGINE WAS REMOVED FROM THE HELICOPTER AND SHIPPED TO THE LYCOMING FACTORY WHERE IT WAS INSTALLED IN A TEST CELL. THE ENGINE WAS RUN FOR 50 MINUTES, TO INCLUDE AN ACCELERATION TEST. THE ENGINE DEVELOPED AND SUSTAINED FULL POWER IN ACCORDANCE WITH THE AEROSPATIALLE AS-350D AIRFRAME APPLICATION. NO MALFUNCTIONS OR DEFECTS WERE NOTED.