The fact that you've hacked together a handful of different environmental and damage mods would introduce some unintended side-effects. Using a scene.dat from one mod can throw the settings out of kilter for the other, as an example.
I think that you've got a situation here where the flaw resides somewhere in scene.dat or materials.dat, due to the damage reflection on the water being the problem. I recall something about altering materials without making adjustments for scene.dat would cause bugs with reflections and other effects.
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