Also no idea how you would set up the elevator up under water, but perhaps setting it up above the water and having it go down might work. Also it would also be possible to protect your Redstone wire, torches and buttons with signs or ladders to keep them dry under the water but it will be a fiddly ...

For anyone having problems setting up a working elevator I have posted some info on the Wiki on how to page http://sargunster.com/btw/index.php?title=How_to#Lift.2FElevator_Circuit . I hope it will be helpful, though one guy did comment that he could not understand it at all, so I am in the proses ...