Fetid Lake of Doom bad for fish and other living things, says state department of Fish and Wildlife:

Management (of Capitol Lake) that includes some estuarine restoration (Estuary and Dual Basin Options) are anticipated to: 1) increase the area, and enhance functions and processes associated with an ecosystem type at higher risk in the Puget Sound Ecoregion (i.e. estuarine wetlands) than the lake options (Status Quo and Managed Lake); 2) favor more special designation species than the lake options; and 3) support fewer exotic species than the lake options.

The researchers released their report yesterday morning at a meeting of the Capitol Lake Adaptive Management Plan group, which is available here in pdf and here on scribd.

Basically speaking, estuary restoration would be good for fish and animals that depend on estuaries, would restore a rare habitat in Puget Sound and would minimize the exotic species that depend on the shallow, artificle lake.

There's also an interesting discussion on sea-level rise, but I would suggest reading or skimming the entire report:

Our best guess is that cyclic discharge of lake water through the 5th-Avenue Dam will likely occur at lower level of the ebb tide than currently occurs. At some point, the current mechanical controls at the 5th-Avenue Dam will no longer be effective at preventing saltwater intrusion into the lake. Again we do not anticipate large changes in species utilization triggered by sea level rise, rather a broadening of marine species distribution as saltwater intrusion into the lake occurs.