hello Drakkhen,
firstly , the underwater settings at fog or water color are not effecting the water's settings at color ,fog...etc above the surface. settings above surface and settings below surface are totally indepedent
now ,about your question : the color that you see (when you move the camera above sub and looking directly down) around your sub is the main color that you have set at the water itself. as you are moving the camera closer to surface (looking to horizon) the water's color is starting to get the combination of MAINLY water's color and reflection maps (specular.tga that told you at a previous message) and fog's color and settings at scene.dat ....especially at fog's distances and at clouds's settings .
be careful with the settings at fog's distances becuase you can create nice horizons if you 'drag' the fog on water closer to your sub (by giving negative values to searelativeZmin) and more ''smooth'' horizons by decreasing the searelativeZmax value BUT this has the side effect of 'flying' ships so you have to drag it as more as possible by keeping an eye on this issue.
also, fog's distances are very important becuase these are also effecting the visuals sensors so you have to keep these values in a balance (that way so to not have 'flying' ships and at the same time to not see your WO screaming that there is ship at horizon and at the same time you ,the player, to see...nothing ...especially at the situations of heavy fog ).
keep lot of experiments, create some simple test missions for each situation and try to balance all these .(thats why M.E.P's sensors are good ONLY for M.E.P). it is not so difficult (sounds so...) ...it just needs a lot of patience .
something else(at env files) that is effecting the sensors are the ambientlightcolor at night or the height of waves (in scene.dat).maybe there is something else(at env files) too that is effecting the sensors but this is all afaik !
a lot of testing at your missions will show you the behaviour of sensors at your environment
about your question for sub's reflection displacement on water : no, it is not your fault....neither env files or skin files are responsible ( i think the settings for this is inside sub's dats files)
ps: keep at it Drakkhen
. I like what i see from your pics and i am ,also like you, waiting the ultimate environment for sh3 ( it was on the way to release a v4 of M.E.P but i was annoyed of the behaviour of some people here and at one other forum so i just canceled it )
bye