On June 8, 1999, approximately 0815 Pacific daylight time, a Hughes 369D, N8306F, autorotated to a hard landing after a loss of power while maneuvering at low altitude about 13 miles southeast of Southbend, Washington. The commercial pilot received minor injuries, but the aircraft, which was owned and operated by Olympic Air, sustained substantial damage. The 14 CFR Part 133 external load flight was being operated in visual meteorological conditions at the time of the accident. No flight plan had been filed, and there was no report of an ELT activation. According to the pilot, who had completed two 30-minute cycles of cedar shake long-line operation just prior to the accident, after he released the first load of his third cycle, he increased power to climb away from the release location. As he was increasing power, he heard a "loud bang," and the helicopter began to spin to the left and lose altitude rapidly. As the aircraft descended, the pilot attempted to avoid contact with the 60 foot trees that surrounded the release area. Just prior to the helicopter reaching the ground, the pilot applied full-up collective, but it contacted the surface hard enough to sustain substantial damage. According to witnesses, just after the pilot released the shake bundle, a puff of smoke came out of the engine exhaust, followed almost immediately by the loss of engine power. As part of the investigation, the engine was removed from the aircraft and shipped to Air Services International, in Scottsdale, Arizona. At that location, the NTSB supervised an inspection teardown of the engine sub-assemblies. During that inspection, it was determined that a three inch section of the compressor impeller disc had separated from the impeller, and substantial damage had occurred to the engine components downstream from the separated disc section. The impeller was then sent to both the Rolls-Royce Allison and NTSB metallurgical laboratories for further examination. These examinations determined that the disc had failed due to the propagation of fatigue cracks that had initiated in corrosion pits in the relief area outboard of the Balance Piston Seal on the aft side of the disc. No anomalies or discrepancies were found in the chemistry, hardness, or machining of the disc material. Both laboratories indicated that the corrosion pits were not the result of repetitive cyclic operation, but instead created by exposure to environmental elements, possible even while in storage as a spare part. The metallurgist also reported that there were other corrosion pits present in the area near where the cracks initiated.