Two people were missing more than four hours after the capsizing. Rescuers searched near a long, rocky jetty at the mouth of Tillamook Bay, an area known for high waves and swirling currents.
Eight survivors - a female and seven males ages 13 to 48 - were brought to Tillamook County General Hospital suffering from hypothermia and needing oxygen because of near drowning; all but one was released, hospital officials said.
"They hit a wave wrong and the boat capsized, that's what I was told," nursing supervisor Heather Scovell said. "They're cold, in shock."
Those treated included members of a family, Scovell said.
The 32-foot Taki Tooo capsized in 15-foot breaking surf as it sailed out of the bay past a 1,000-yard jetty shortly after 7 a.m., said Coast Guard Chief Petty Officer Paul Painter.
CBS News Corresopndent Sandra Hughes says there was a small craft weather advisory in place at the time of the capsizing. And the Taki-Too was large enough that it shouldn't have been affected by the waves.
However, captains who sail in and out of Tillamook Bay where the craft overturned tell Hughes the area at the mouth of the bay heading into the ocean can be treacherous. An excursion boat capsized there last summer, but nobody was killed, officials told The Associated Press.
The boat's owner, Mike Buell, watched from shore as it sank about three miles from its home port.
"A large wave hit the side of the Taki Tooo and it capsized, just swamped," said Buell, who runs Garibaldi Charters, a sport fishing company.
The boat flipped so quickly that the passengers probably didn't have time to jump clear, Buell said in a telephone interview.
Buell said he considered the captain, Douglas Davis, an experienced skipper.
The Coast Guard sent three helicopters and two lifeboats to the mouth of the bay, 60 miles west of Portland, to search for survivors, said Coast Guard Cmdr. Patrick Brennan.
By midmorning, one body pulled from the water had been brought to the Tillamook Coast Guard station and eight others lay on the beach at Barview State Park just north of Tillamook Bay, Painter said. The wreckage of the boat washed ashore along the jetty.
Correspondent Hughes describes it as a gruesome scene. One eyewitness said he saw "bodies laying on the beach, people dragging bodies off the beach."
Jeff Folkeme, owner of the Garibaldi Marina, a setting-off point for pleasure boat excursions, said he saw the Taki Tooo sailing past his dockside office Saturday morning.
"Everybody was all happy and jolly. They were going to go fishing," he said. "It was a normal day."
The search for the two missing people continued Saturday afternoon. With 50-degree water, Brennan said, the longest anyone could likely survive in that part of the ocean would be four to eight hours.