As the helicopter was cruising at 1000 feet agl, the engine suffered a complete loss of power. An autorotation was commenced and the pilot headed the aircraft towards a clear area, to land. At the completion of the landing flare, the heel of the skids dug into the ground and the main rotor blades struck the tail boom. An examination of the engine determined that the fuel regulator diaphram stem had suffered a fatigue failure. This allowed the diaphram to shut off fuel flow to the engine. The pilot elected to carry out a zero speed touch down because he believed that the terrain was unsuitable for a run-on landing, but he misjudged the landing flare.