On April 22, 1998, about 1130 Alaska daylight time, a wheel equipped Cessna 207A airplane, N7438U, sustained substantial damage during a collision with snow covered terrain, about 3 1/2 miles southeast of Scammon Bay, Alaska. The airplane was being operated as a visual flight rules (VFR) cross-country on-demand passenger flight under Title 14 CFR Part 135 when the accident occurred. The airplane was operated by Hageland Aviation Services Inc., Anchorage, Alaska. The certificated airline transport pilot, and four of the six passengers aboard, were not injured. Two passengers received minor injuries. Instrument meteorological conditions prevailed in the area of the accident. VFR company flight following procedures were in effect. The flight originated at the Hooper Bay Airport, Hooper Bay, Alaska, at 1107. In the pilot statement attached to the pilot/operator report (NTSB form 6120.1/2) submitted by the operator, the pilot reported he was in Scammon Bay about 1030, and flew to Hooper Bay to pick up the accident flight passengers. The passengers were a high school basketball team, and their coach, who were traveling to Scammon Bay. During the flight to Hooper Bay, the pilot reported low clouds were present in an area of mountains along the route of flight. He utilized a mountain pass to transit the area below a 200 foot ceiling, and decided his route was not suitable for the return flight to Scammon Bay with passengers aboard. During the accident flight to Scammon Bay, the pilot decided to proceed east of the previously utilized mountain pass. The flight however, still necessitated transiting an area of low hills. As the flight was approaching Scammon Bay, snow covered terrain was rising toward low clouds over the mountains. The pilot observed what he thought was the approach end of the runway at Scammon Bay, and began a descent from 2,500 feet msl. The apparent runway was actually a creek bottom. The pilot began a turn, and observed rising terrain. He stopped the turn and applied full power. The airplane collided with rising terrain in a whiteout condition, about 900 feet msl. The airplane then nosed over. Search and rescue personnel from both villages located the accident site about 1 1/2 hours later. A passenger in the airplane reported that about 10 minutes after departing Hooper Bay, the airplane entered an area of fog at an altitude of 3,000 feet msl. His view of the ground disappeared, and the area around the airplane was completely white. About 5 minutes after entering the fog, the airplane collided with snow covered terrain.