You can tweak the water colour and reflectivity but I think the devs didn't include code to make the water transparent from the above, because they wanted to keep the system spec. low so SH3 could run on most computers... But I hope I'm wrong, good luck, it coud be great with transparent water!

I will allso poke a little with the settings/code to investigate it further.
EDIT:
Wait! there is hope it looks like SH3 can show tranparency from the above: :P
... :hmm: