The pilot of the helicopter reported that with two passengers aboard, he approached a mountain lake to a hover above the water and saw the engine and rotor speed decrease to the green arc of the engine and rotor tachometer. He maneuvered the helicopter to the shore, and with the engine and rotor continuing to droop, he landed on some “substantially sized granite rocks” where the skids became lodged in the rocks. The helicopter then tipped forward and the main rotor blades impacted the rocks, which resulted in substantial damage to the main rotor and fuselage. The pilot reported there were no mechanical malfunctions or failures with the helicopter that would have precluded normal operation. The pilot added that he did not verify the performance capability for an in-ground effect or a hover out of ground effect over water. The Helicopter Flying Handbook, FAA-H-8083-21B, states, “When hovering over surfaces as tall grass, trees, bushes, rough terrain, and water, maximum ground effect is reduced.”