On April 26, 2004, approximately 1615 Pacific daylight time, a Hiller UH-12E, N9785C, registered to/operated by Sundance Helicopters, Inc. and being flown by a commercial pilot sustained substantial damage during a hard landing following a mechanical malfunction while on short approach to landing near Haines, Oregon. The pilot suffered minor injuries. Visual meteorological conditions existed and no flight plan had been filed. The flight, which was returning from an agricultural spray run, was operated under 14 CFR 137, and had departed Elgin, Oregon, approximately 40 nautical miles north a short time before the accident. The pilot reported to the Safety Board's investigator that he departed Elgin with about 20 gallons of fuel aboard and as he was descending through about 100 feet above ground at 60 knots airspeed (refer to Attachment HV-I and HV-II) and approaching his base of operations he heard a loud bang. He immediately transitioned into an autorotation but as he flared prior to touchdown he had insufficient rotor RPM and the helicopter landed hard with the main rotor blades severing the tailboom. The pilot reported that as the helicopter impacted the ground he noted the Rolls Royce (Allison) 250-C20B engine spooling up and suspected a transmission malfunction. He also stated that he did not hear any audible engine out alert during the entire sequence and that the helicopter was not equipped with an auto-relight system. An inspector assigned to the Federal Aviation Administrations (FAA) Boise Flight Standards District Office (FSDO) examined the helicopter following the accident and found no outward evidence of any mechanical malfunction. The engine was shipped to the facilities of Rolls Royce in Indianapolis, Indiana, where it was examined. It was noted that there was no "O" ring at the base of the anti-ice valve and there was no rubber seal within the valve. The valve was replaced with a functional unit and the engine was test run. Engine performance during the test run was normal. The engine was subsequently returned to the Operator.