On April 6, 2000, at 0800 hours mountain standard time, a homebuilt Rotorway Exec 162F, N21901, sustained substantial damage when the main rotor blades contacted the tail boom during an autorotation near the Memorial Airport, Chandler, Arizona. The helicopter was being operated by Rotorway International under the provisions of 14 CFR Part 91. The certified flight instructor and student pilot were not injured. The local area instructional flight originated at the Stellar Air Park near Chandler at an unknown time. Visual meteorological conditions prevailed and no flight plan was filed. The pilot reported that while at 300 feet agl on a downwind traffic pattern leg, they heard a loud noise from the rear of the helicopter. He immediately entered an autorotative descent. During the descent, he checked the cockpit gauges and found no discrepancies. He decided to roll the throttle back on. The pilot stated that the engine rpm increased, but not the rotor rpm; the needles were not coupled. There was a barbed wire fence in their flight path, so the pilot extended the glide, flared, and landed hard. The left landing gear skid collapsed and the main rotor blades struck the tail boom. The helicopter secondary shaft that transmits power from the engine to the main rotor, the water pump, the fan, the tail rotor, and the lower fan was examined in the Safety Board's Materials Laboratory in Washington, DC. There were many light scratches longitudinal to the shaft axis and numerous short circumferential score marks and light scratches observed on the surface of the secondary shaft. The shaft was in two sections and exhibited a fracture surface that was on a flat transverse plane that contained multiple crack arrest positions, typical of fatigue cracking. About 20 percent of the fracture surface adjacent to the origin area contained a rust-colored discoloration. The edge of the fracture face had been mechanically damaged which had obliterated the fracture surface details directly adjacent to the origin area. The band of circumferential marks on the shaft surface was measured, adjacent to the initiation site, and was found to be 0.16 inches wide. Measurement adjacent to the initiation site showed that the first circumferential score mark was 0.09 inches from the fracture face.