Fresh- or salt-water?
You could make buttons with an LDR (covering them -> less light -> means press) and analogRead(). ..Is there ambient light?How many buttons you need? do you have analog lines free?
Fresh water is not that good a conductor, however it has a high dielectric constant (probably higher than fingers).This makes me think that for capacitive sensing you want to detect the presence of an object that has a low resistance is the aim.So the capacitive contacts should be quite widely spaced and you are looking to detect a signal coupling from one contact to the object, travelling along the object's internal resistance and then modulating the other contact. So the capacitive coupling at each contact is not the dominant effect, its the resistance between them... My idea is that water couples well at both ends but has a higher resistance than fingers and so registers a lot less.That's if my intuition is right, of course. Fingers contain blood capilliaries which have a reasonably high salt content (which should be a much better conductor than fresh water).Salt water I would have said "give up"! (Well google around first!)