I can confirm watching a ship sink in heavy seas now for 100% certain with no bugs. Took 3 minutes 50 seconds about from cease fire to it finally going down. This was with a half hull 3/4ths full water bar. I wont post pictures cause i play at 1900x1200 and thats stupid big and i dont feel like cropping right now..im playing my game lol.
Here is the ship, still alive (somehow), note the time and the map that shows it still alive.
http://img.photobucket.com/albums/v3...urningship.jpg
Note the amount of freaking holes i had to punch in it just to get it down 1/4th a water bar.
http://img.photobucket.com/albums/v3...hter/holes.jpg
Here it is sunk. Note the time again.
http://img.photobucket.com/albums/v3...ghter/sunk.jpg