Good German Food?
I'm going to have to agree that Seattle is still lacking in a really good place with "bodenständiges Essen." The Prost places are much more about the beer than the food, so the menu is simple, although I had a decent Kassler last time at the West Seattle branch.
As far as Leavenworth goes, meh. Places there are okay, but really good? I'd rather go down to Portland and go to one of the Rheinlander/Gustav's places. There's a nice German place near downtown Victoria BC, and if you're planning to take a break in San Francisco, don't miss Suppenküche. Otherwise, the PNW restaurant scene gives good old Central European (German/Austrian/Czech/Hungarian) food rather short shrift.
Well Being a german I found a Place down in Fife that has decent food Not like grandma's but decent. It is around the corner from the Poodle dog, I just cannot remember the name. Other than that the only place I could recomend would be Odessa WA On HWY 2 north of Ritzville. But that would be a drive alright.
No idea about Kitsap. Options in Seattle aren't great either.
In Seattle, Szmanias is probably the best for a sit-down place. I've never thought much of the food at the People's Pub or the Bierstube/Prost/Feirabend sisters.
I have a German friend who swears by the Schweinhaxen at King Ludwig's in Leavenworth, but getting there from Poulsbo could take half as long as the Lufthansa flight from Portland to Frankfurt. I've never been because, well, faux Bavarian tourist traps (the entire town of Leavenworth, no particular offense to King Ludwig's) aren't my thing.
The best German food in the area is probably not at a restaurant: the provisions at Hans' Sausage & Delicatessen in Burien.