I think there was a mod for this made awhile back, possibly by kriller2. I took a quick look but could not find it. Maybe someone else here can point you in the right direction. I see Redwine has a mod in the updated 1.3 list, Improved Underwater Visibility, you could check this one out.
Turning some of the graphics options certainly gives you clearer water, but takes away from some of the other great stuff.
Personally I like this effect as compared to SH3, but to each his own
RDP