During the take-off, the engine instruments were checked while the helicopter was in a hover and no abnormalities were noted. Just as forward movement was commenced a loud noise was heard and all engine power was lost. A significant drop in rotor rpm occurred and the main rotor struck the tail boom during the subsequent forced landing. Inspection revealed a total mechanical failure of the engine compressor. The majority of compressor blades were found to be broken and the resulting degree of damage precluded identification of the location of the initial failure. However, the examination of sections of blades revealed corrosion pitting consistent with inadequate compressor washing servicing. The aircraft had been operating in a corrosive atmospheric environment and it is probable that the initial failure within the compressor resulted from corrosion induced fatigue.