That is a classic case of hull pox, also known as blisters, boat pox, or damage by osmosis. You may recall the classic high school biology experiment demonstrating how osmosis works. (Tie both ends of an osmotic membrane, toss it into a container of salt water, & wait. In a few days it will swell up nearly to bursting).
I've seen it on some boats I looked at in Vancouver in the '80s. I've never fixed it, it will be labor intensive to do properly. There is a ton of material on the web, just google it. You will want more info than you will get from a few posts. Good luck.
Here are a few hits, Don Casey has some very good books on hull/boat repair.
http://www.boatus.com/boattech/casey/03.htm
http://www.boatmexico.com…id=&id=132&ex=0&content=
http://www.epoxyproducts.com/blister4u.html
http://www.zahnisers.com/blisters_hydrolysis.htm
http://boatsafe.com/nauticalknowhow/1220983tip.htm
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Hobie 18 Magnum
Dart 15
Mystere 6.0XL Sold Was a handful solo
Nacra 5.7
Nacra 5.0
Bombardier Invitation (Now officially DEAD)
Various other Dock cluttering WaterCrap
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