The pilot had approached and landed on a bluff to discharge his two passengers. However, before discharging the passengers, he decided to takeoff and find a better landing area. When the helicopter was about 10 to 20 ft from the takeoff point, but approximately 200 ft AGL, there was a decrease in RPM. Initially, the pilot thought he was settling with power. He lowered the nose and collective, but was unable to regain the RPM, but he felt the helicopter yaw to the left. He felt mast-bumping and realized he must be cross-controlling with too much right pedal and left cyclic. He then entered an autorotation. The helicopter collided with trees on the side of the bluff and rolled to the bottom of the hill. An examination revealed that the No-2 cylinder compression was low. The No-2 intake valve had become tuliped and was leaking. There was evidence that it had been pounding. Also, there were indications of high engine RPM and temperature. The helicopter had been flown 38 hrs since the last inspection.