Sounds like you're trying to do the same thing I just did, to check for the presence of water at a pair of electrodes. I used a 74HC14 Hex Schmidt trigger inverter to create a 1MHz AC signal that was on the output pin in the water. To receive that signal, I created something called an "Envelope Detector", which was simply a 1N4148 diode, a small cap with a 10mega ohm pulldown resistor to ground on the output of that diode (receive pin goes to one end of the diode, output is the striped end). Ran the output to an 2n2222 npn transistor, which when triggered by the "envelope detector" will pull the CPU pin low.
I followed these instructions for the Schmidt trigger oscillator: http://www.fairchildsemi.com/an/AN/AN-118.pdf
and these instructions for the Envelope detector: The Envelope Detector
I used a pair of 2.2k resistors and a .001uf ceramic cap for the oscillator circuit, and a 1n4148, a .1uf ceramic cap and 10mega ohm resistor for the envelope detector circuit. It creates 1MHz AC..
credit: david in #SeattleRobotics.. 