On August 8, 2010, about 1303 central daylight time, an amateur-built Searey amphibious airplane, N452TR, piloted by a sport pilot, was substantially damaged during an in-flight collision with Cokato Lake near Cokato, Minnesota. The personal flight was being conducted under 14 Code of Federal Regulations Part 91 without a flight plan. Visual meteorological conditions prevailed. The pilot was seriously injured. The local flight departed from the lake shortly before the accident. The pilot reported that shortly after takeoff the propeller began making "excessive noise and vibration." The airplane had just crossed the lake shoreline and was approximately 800 feet above ground level at the time. He reduced engine speed and maintained best glide airspeed in order to find a safe location for a precautionary landing. He stated that there were some obstructions in his flight path and he executed a 180-degree turn to avoid them. However, the airplane subsequently "lost too much altitude in the turn and impacted the water." A witness reported that the airplane was proceeding southbound. He noted that the airplane was repeatedly climbing and descending, and the engine sound seemed to be alternating between a higher and lower intensity during those altitude oscillations. The witness stated that the airplane entered a left turn, and as the airplane approached a north heading, the nose dropped and the airplane went straight down impacting the lake. He added that the engine sounded as if it was running during the final descent. The airplane came to rest upright in approximately 3-1/2 feet of water. Weather conditions were reported as clear skies and light winds at the time. The pilot stated that after the accident he observed a separation of the composite skin on the forward face of one of the propeller blades. The separation in the skin was located about mid-span and ran the full width (chord) of the blade. The remainder of the blade, including the blade tip and the fitting at the root of the blade, appeared to be intact. He added that the engine assembly and engine mount appeared undamaged. The engine remained securely attached to the mount. The airplane sustained damage to the hull area and forward/nose structure. The airplane was equipped with an Ivoprop 3-bladed composite propeller assembly. The blade pitch was fixed in-flight, but it was ground adjustable. It was installed new and had accumulated approximately 33 hours time in service. The pilot reported that he conducted a pre-flight inspection and there was no visible damage to the subject propeller blade.