Found it!!! It was called
Deadly Tide, from Microsoft. It's more of a rail based shooter, but technically, you're in a hydro-fighter.
Link to a Review:
http://www.worldvillage.com/wv/gamez...views/tide.htm
System Requirements:
IBM: Pentium 75 or greater; Windows 95; 8mb ram; 25mb hard disk space; 4X CD ROM or faster; PCI SVGA video with 1meg memory; 256 color display; mouse or other pointing device (joystick recommended); sound card with speakers or headphones Macintosh: not available