Here is some stuff I posted last year on this subject. I decided to set aside all the evidence of the natural world, as well as the historical evidence mentioned above, that made a global flood simply impossible, and just concentrated on showing how a local flood was even a more likely interpretation just based on Scriptural analysis alone. Personally, I think that it is possible that the story is an extrapolation of a true event, told in a method to convey certain of God's truths to us. But even if you require that it be purely historical, a local flood still makes more sense:
To start with, while a plain reading would seem to indicate God (through the writer) was referring to a flood covering the whole planet, we have seen too often that a plain reading ends up being plain wrong.
So, what did the writer of Genesis mean by all the Earth or the whole Earth? The Hebrew words are kol which means all and erets which means land, earth, ground or country. The important point is that there are numerous uses of this term kol erets throughout the Old Testament to mean almost every combination of these possible definitions. In some places it even refers to a people and not the land at all. There are about 200 uses of the term kol erets and the large majority of them refer to local geography (I can give numerous examples, if desired).
And, of course, this use of the term all the earth to refer to local areas is consistent with the mindset and method of reference in ancient times generally. Even much later, ancient historians would say that Alexander the Great conquered all the world and then wept for other worlds to conquer.
So, the term kol erets can be interpreted many different ways: everything from the entire world to a very local area or even a group of people. Further, although I am not a Hebrew scholar, I have heard that there is another word tebel used in the Old Testament which always refers to the entire world or the entire inhabited world. This word is never used to describe the flood.
In fact, within the flood story itself, the use of kol eretsindicates a local area. In Genesis 8:5, it indicates that Noah was able to see the mountains. But in Genesis 8:9, the dove found no resting place because the water was on the surface of kol erets. Since there were mountains visible to Noah already, the all the earth referred to in Genesis 8:9 can only be referring to a local area.
In short, then, the only reason *not* to believe it was a local flood rather than a global flood is if anything *else* in the Biblical record requires such a belief. There are a couple of factual statements that might argue in favor of a global flood:
-God said He meant to destroy all the people on the Earth. Well, that gets back to what was meant by Earth. If He meant to destroy all the people of a region, but found one man of that people worthy to live, and told that man to gather up all the animals of the region so that this man, and the region, could start fresh, this would correspond with the story factually. But what about theologically? If God meant to start the world afresh, and all flesh had become corrupt how could a local flood accomplish this? Again, this refers to erets and can be referring to a local group of people. God very often in these early days interacted with particular local groups, such as the Hebrews once they developed as a defined group. He did not hesitate to bring down punishment on this local group to the exclusion of others. If that region had become corrupt and God wished to destroy that region, the theological message is equally clear.
-The flood rose to about 8 feet above the mountains. The word used here is har, which can be mountain or hill, and it is very often translated as hill in the Old Testament. The translators chose the mountain translation since they, obviously, thought the passage referred to a global flood and this made sense. Translators are human and fallible.
Also, on a side note: Olive trees do not grow in the mountains, I believe, but only in low lying areas. So that dove was most likely in a low-lying area when the ark came to rest.
-God said He would not flood the world again. If it was a local flood, then wouldnt this mean God lied since there have been many local floods? God repeats often in Genesis 9 that His covenant is with the people and life on the earth. The entire covenant can just as easily be read to say that He promises never to bring a flood to destroy all the life of a region, or could be even read as specifically referring to that specific region. This can be read as an intent never to bring complete judgment in that fashion, but allowing the natural activities do go about its business (thus any floods, however destructive, would not be an act of judgment). Or, it can be read more literally: that God will not allow any flood to destroy all life in a region. As far as I know, there has never been a flood which destroys a region to the last man. Again, the message of punishment, grace and redemption are all there for us to learn from, whether local or global.
So, since there are two different possible and legitimate honest interpretations of the Scripture, I am more likely to believe the one that seems to be supported by the vast weight of the evidence found in the world around us, including history, geology, biology and, yes, a certain amount of common sense. Of the greatest persuasion to me is the historical evidence since that is my background. There is no indication from the historical record that there was any widespread destruction of humanity in places like Egypt during the proposed flood period. In fact, the historical evidence basically belies this possibility entirely.