I just took out an S-18 using a wave attenuation value of 0.03 and waited for a 15m/s storm. I found one after a few days and took the S-18 through a few tests. The boat dived okay and surfaced properly (I tested this three times just to be sure). The flying thing doesn't happen (although it's not quite as good looking as the 0.01 value. Better still the sub no longer travels on rails - it pitches and rolls more like what we were used to in SH3 (but not too much - about what I'd expect for a little boat like the S-18). I also did two long periscope depth dives to the full extent of the battery and I had no problem with leaking compressed air.
I think we've found the sweet spot guys.
So you might want to try adjusting the wave attenuation to 0.03 on your games and see if you get good results too. I'll test other boats later today or tomorrow, but since the S-18 was the boat having problems I'm hopeful that this has cracked it.