Shortly after takeoff from Hudson Lake, the left wingtip contacted the water causing the aircraft to cartwheel. The aircraft came to rest inverted and floated for a short time before sinking. A witness reported the waves on the lake were at least 4 ft high and breaking over the floats, and the weather was the worst he has seen since arriving in late May of 1982. The witness reiterated gale force winds and heavy rain. He also stated the waves in the cove where the takeoff started were opposite to the direction of takeoff and the waves were not a true indication of the wind direction. The waves were almost 90 degrees different than the waves in the center of the lake. He said it was difficult to tell when the aircraft got on step because it was bouncing around badly and the water was hitting the struts. The only person he could see wearing any flotation device was the pilot. All the life vests were located under each passenger seat secured in a pouch by metal twist fasteners.