At approximately 0830 Pacific time, the float-equipped airplane was substantially damaged during a precautionary landing in Puget Sound. The Airline Transport pilot and his 10 passengers were not injured. The flight was being as a Part 135 air taxi; instrument conditions prevailed. The pilot later said that as he approached Port Townsend, the flight encountered lowering ceilings and visibility. Water conditions were glassy smooth with no visual definition. As he began to turn back, conditions worsened and he elected to perform a precautionary landing on the water. With no visual definition, he misjudged the landing and landed hard. The airplanes fuselage was bent/deformed, the fuselage skin was wrinkled, and the dorsal stabilizer was bent/wrinkled.