Lt Cmdr Matthew Kroll of the US Coast Guard said the bodies were found close to the wreckage of the Conception, which caught fire in the early hours while 33 passengers were asleep below deck.
He said the bodies showed injuries consistent with drowning.
At least eight people are confirmed to have died. A further 25 are still unaccounted for.
The 75ft diving boat caught fire off the north coast of Santa Cruz Island. Rescuers reached the scene at 3.28am local time.
Five crew members who were on deck at the time were rescued by a passing boat, the Grape Escape.
It was initially thought there were 34 people trapped on board but that number was later corrected to 33.
Lt Cmdr Kroll told CNN that “there could still be people out there so we’re still searching” but said that the more time passed the less chance there was of finding people alive.
He said: “We don’t know if it was an explosion or a fire that slowly grew. Everything happened quickly enough that people could not get off the ship.”
The search was being carried out by boats and helicopters, with dive teams arriving on the scene shortly, he said.