By Laura L. Myers

OLYMPIC NATIONAL PARK, Washington (Reuters) - In the wilderness of Washington state's Olympic National Park, hydraulic hammers chip away at the Glines Canyon Dam in the largest dam-removal project in U.S. history.

The grinding knocks off chunks of concrete, slowly removing the once-imposing 210-foot-tall (64-metre) structure, whose construction in 1927 on the Elwha River blocked one of the world's most prolific salmon runs.

Nine miles downstream, workers last month removed the 108-foot-tall (33-metre) Elwha Dam, built in 1913, allowing the river channel there to flow freely for the first time in nearly a century.

The two dams, about 80 miles northwest of Seattle, blocked migratory routes of salmon and steelhead trout to some 70 miles of tributary habitat, in the process robbing Native Americans of income by halting a treaty-guaranteed reservation fishery.

The river teemed with thrashing pink salmon before the Elwha Dam was built to generate electricity for the nearby mill town of Port Angeles, with a current population of around 19,000, and later, to a naval shipyard in Bremerton, about 80 miles away.

The Elwha Dam's removal, completed in late March, was hailed by Governor Christine Gregoire as a significant environmental milestone that "shows what happens, when against many odds, a river is restored to its natural beauty."

Supporters of the dam's destruction say the benefits to the environment of tearing it down outweigh the loss of its aging power-generating station.

The destruction of the Glines should be finished in about a year to 18 months, ending the biggest dam demolition in U.S. history.

The removal of the two dams - ordered by a 1992 law signed by then-President George H.W. Bush - is aimed at restoring the natural habitat of more than 300,000 salmon. Economic and environmental impact analyses delayed the project's start.

Some environmentalists see the Elwha as symbol of a future in which more rivers can flow unbridled by behemoth dams built in the 1900s. Other dam demolition projects are on the drawing board across the nation.

"The Elwha and Glines Canyon have captured people's imaginations in terms of what's possible," said Amy Kober, spokeswoman for American Rivers environmental organization.

ELWHA ONCE BRIMMED WITH SALMON

Tribal lore recalls that Elwha's five species of salmon were so plentiful that one could walk across the 50-foot-wide (15-metre) river, at the Elwha Dam site, on the backs of the fish.

"Culturally, the salmon are very important to the tribe and in everything the tribe does," said LaTrisha Suggs, a spokeswoman for the 1,000-member Lower Elwha Klallam Tribe.

The $325 million restoration project is lowering water levels in some parts of the river and uncovering sacred Indian artifacts and cooked animal bones dating back as far as 7,000 years, she said.

Park officials released 600 Coho or king pink salmon into the Elwha in October. Based on nest counts, the Elwha currently has 3,000 fish.

Half of the fish released stayed behind to reproduce in the Elwha. At least 100 gravel salmon nests found in the last two weeks produced hundreds of 2-inch-long (5-cm) fry Coho, the first fish to hatch in the river above the dams in a century, said Rob Elofson, the tribe's restoration director.

"They're surviving. They're hatching. They're coming out well," Elofson told Reuters. "It's a very good sign."

Olympic National Park spokeswoman Barb Maynes projected a bounty of 400,000 salmon during the next three decades.

But how that should happen is a matter of dispute. Several environmental groups filed suit in February in opposition to the planned introduction of hatchery steelhead trout into the river.

Hatchery fish can reduce the survival of wild native fish and breed with them, environmentalists said. Adding hatchery fish to the river's native stocks is a delicate balancing act, but one government scientists say is necessary.

"We fear if there's no supplementation there could be a very real danger that wild stocks won't be able to re-establish themselves," said Brian Gorman, spokesman for the National Marine Fisheries Service in Seattle.

Three fish in the Elwha are threatened with extinction: Chinook salmon, steelhead and bull trout.

AGING DAMS

Native plants will soon blanket both of the dams' sprawling mud flats in a $4.1 million, seven-year re-vegetation program that began in November.

In Olympic National Park, moss-draped branches that resemble gnarled, outstretched hands beckon visitors, but a road leading to the Glines remains closed because of the construction.

At the dam, a muddy slate-gray Elwha River rushes white water, spraying a rainbow over the Glines' spillway. Despite the massive demolition project, deer graze placidly nearby and rangers had spotted a herd of elk just days earlier.

Similar dam demolitions and river restoration projects are under consideration across the nation.

The fate of four other hydropower dams in Washington state on the Lower Snake River is also under debate in federal court in Portland, Oregon. The Snake River, a main tributary to the Columbia River, drains about 109,000 square miles (280,000 sq km) in Washington, Oregon, Wyoming, Utah and Nevada.

In what are viewed by environmentalists as some of the most outspoken statements on protection of Pacific Northwest salmon, U.S. District Court Judge James Redden told Idaho Public Television in late April that those dams should be taken down to protect salmon runs.

Redden, 83, ruled in August that under the federal Endangered Species Act, a federal salmon protection plan was insufficient. Redden, who is no longer presiding over the Snake River dams case, declined to comment to Reuters.

Elsewhere in the country, a restoration plan for Maine's Penobscot River includes buying and removing two big dams and creating a fish bypass around a third to restore 11 fish species, including Atlantic salmon.

California environmentalists hope to implement a $83 million plan to tear down the San Clemente Dam, a 106-foot-high (32-metre) concrete arch structure built in 1921 on the Carmel River.

In Olympic National Park, nature enthusiasts envision an increased interest in kayaking, rafting and fishing on the Elwha. Morgan Colonel, owner of Olympic Raft & Kayak, the park's only licensed water sports concessionaire, estimates that 2,000 visitors, or a slight increase from last year, will float down the Elwha in 2012.

"The lure of the Elwha right now is the historic dam removal," said Colonel, who recently moved from Jackson Hole, Wyoming, after tiring of overcrowding on the Snake River. "Who knows what this river will do?"

(Editing By Cynthia Johnston and Eric Beech)