After updating to Skyrim 1.5, I'm not longer able to see underwater at all. It's pretty much just a blank color now.

One user reported this in the Beta forum.
He solved it by installing the newest NVidia driver.

I have the latest nvidia drivers and it does not work with my GTX260. What did work was turning off the DoF in the ini, although now the water is crystal clear instead of the murky water I had prior to the patch

I will try it although installing the latest version of my ATI card caused me lots of problems

For me, removing the mod "Skyrim HD - 2K Textures" by NebuLa, fixed this issue. If you have any water related mods, they seem to contradict with the 1.5 patch.
I hope you found this helpful.

I turned off all my mods still not working

Same here nothing i do can fix it. I have the newest version of Nvidia drivers and I shut off all the mods that change water and to no avail. It really breaks the game for me. Seeing as I'm an argonian.

Well there is a fix but it over does the required effect. Go to SkyrimPref.ini in your My doucments> my games> skyrim and change bDoDepthOfField=1 with bDoDepthOfField=0. But that will make your water crystal clear and will remove any murkiness. I contacted Behtesda about this I hope they fix it soon.

I'm having the same issue. Removed any moded water textures and with latest drivers, gt560ti . Still not fixed. I'll try the DOF=0 and see if that works.

I had this issue and how I solved it was to totally uninstall the ENB Series "Enhanced Shaders" mod. I'm also running the newest Nvidia drivers.