THE PLT AUTOROTATED THE HELICOPTER INTO THE WATER AFTER A LOSS OF POWER WHILE TRANSITIONING FROM FWD FLIGHT TO A HOVER. WHILE LANDING WITH THE EMERGENCY FLOATS ARMED, HE ATTEMPTED TO DEPLOY THE FLOATS BUT WAS UNABLE. THE PLT & PAX EVACUATED. THE HELICOPTER SANK. EXAMINATION REVEALED THE ELECTRICAL WIRES FOR ACTIVATION OF THE DISCHARGE AGENT SEPARATED ON IMPACT, RENDERING THE FLOAT DEPLOYMENT SYSTEM INOPERABLE. THE COMPRESSOR SECTION OF THE ENGINE SUSTAINED A CONTAINED FAILURE. THERE WAS NO EVIDENCE OF FOREIGN OBJECT INGESTION, FAILURE OR MALFUNCTION OF NO'S 1,2, OR 2.5 BEARINGS, RUBBING OF THE ROTOR BLADES AGAINST THE COMPRESSOR CASE, OR AXIAL MOVEMENT OF THE ROTOR ASSY. A METALLURGICAL EXAMINATION WAS UNABLE TO DETERMINE THE EVENT RESULTING IN THE FAILURE OF THE COMPRESSOR SECTION. THE OPERATOR STATED THAT COMPANY PERSONNEL WERE NOT ACCOMPLISHING THE SALT WATER CONTAMINATION REMOVAL PROCEDURE RECOMMENDED BY THE ENG MANUFACTURER.