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We study the problem of estimating a physical process at a central processing unit (CPU) based on noisy measurements collected from a distributed, bandwidth-constrained, unreliable, network of sensors, modeled as an erasure network of unreliable "bit-pipes" between each sensor and the CPU. The CPU is guaranteed to receive data from a minimum fraction of the sensors and is tasked with optimally estimating the physical process under a specified distortion criterion. We study the noncollaborative (i.e., fully distributed) sensor network regime, and derive an information-theoretic achievable rate-distortion region for this network based on distributed source-coding insights. Specializing these results to the Gaussian setting and the mean-squared-error (MSE) distortion criterion reveals interesting robust-optimality properties of the solution. We also study the regime of clusters of collaborative sensors, where we address the important question: given a communication rate constraint between the sensor clusters and the CPU, should these clusters transmit their "raw data" or some low-dimensional "local estimates"? For a broad set of distortion criteria and sensor correlation statistics, we derive conditions under which rate-distortion-optimal compression of correlated cluster-observations separates into the tasks of dimension-reducing local estimation followed by optimal distributed compression of the local estimates.