This paper presents a distributed hybrid power state estimator, with measurements from both the traditional supervisory control and data acquisition (SCADA) system and the newly invented phasor measurement units (PMUs). The proposed distributed algorithm, which jointly estimates the power states and PMU phase errors, only involves local computations and limited information exchange between neighboring areas, thus alleviating the heavy communication burden compared to the centralized approach. Simulation results show that the performance of the proposed algorithm is very close to that of centralized optimal hybrid state estimates without sampling phase error.