Take this with a grain of salt, but I think the whole thing can be clearer and shorter.
As it is right now, I find it mixes two issues: the matter of the real impact of hate-inciteful speech (as your last several paragraphs detail), versus the actual effects of the hate crimes legislation. I would want to do everything possible to avoid confusing the readers that it actually MAY have something to do with speech, since it doesn't.
Then again, there's the matter of your words quoted in a context to mean the opposite of what you said - so maybe, you DO have to 'go there' after all.
Can you address the issue of the out-of-context quote in a separate letter to the station? Then leave the issue of hate crimes legislation as the main letter that you circulate to the other venues? It would shorten the letter considerably, and keep the local reference local at the same time.
Again, my opinion (salt grain) is that I'd like to see you specify clearly, in brief, that the hate crimes legislation only affects perpetrators of VIOLENT CRIME. Speech, conscience, the local pastor, will not be affected AT ALL (unless the local pastor runs out to gay bars with a baseball bat on Friday nights) and are therefore not a part of the conversation.
The issue of where *speech* leads is a separate one (related, yes, but not part of the legislation) and so it is not a part of the discussion. We should talk about what the legislation WILL DO, not about other issues.
That's my 2c.
There were a few things that either I found unclear, or too strongly worded of an "attacking" language - I'm going to quote your draft next and put in a few suggested changes - take 'em or leave 'em.