Right after choosing my sign I followed the path down to the trapper guy at the lake and saw this.

http://steamcommunity.com/profiles/76561197993318439/screenshot/632982493461842257?tab=public

GTX 470
Phenom II X4 940
Windows 7 64-bit
8 GB RAM

Happened to me too... The water gets progressively clearer as I approach, until my character is swimming in the clearest water I've ever seen.

I think my problem is a little different maybe. You can see that just that section of water is missing. It remains like that at any distance.

I am guess that boat is supposed to be floating also so the water is just completely gone.