The water did clear up after some hours, but Andy Ryan at Seattle Public Utilities tells us:
Discolored water has been reported in recent days in some areas of Seattle, including Beacon Hill. A likely cause is testing of fire hydrants by the Seattle Fire Departments. The water is safe to drink, but it may be unappealing, so we recommend that you wait until it clears before drinking it.
The water should clear on its own. Try running the cold water for a few minutes to see if it is clearing or still discolored. If the water does not clear, let the water sit for an hour. Then run the water for a few minutes and flush the toilet a couple of times.
If your water remains discolored, please contact Seattle Public Utilities Customer Service at (206) 684-3000.