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Sure, there are lots of plug-ins to create water and liquids, but what fun is having a filter do all of the work for you? Here is a simple way to create a flood of effects, if you will.

Instructions

1. First create your clouds. If you make your Photoshop clouds file a multiple of 64, like 640x640 or 512x512, they will tile seamlessly. Set your colors to black and white (the defaults). Select Render > Clouds. If you hold down the option key (alt key on a PC) while rendering clouds, you get a much more contrasty cloud image.
2. One nifty feature of this cloud filter is that it's random, so each time you run the filter, you'll get a different result. I saved 3 versions of clouds at 512x512, rgb pict files. Save them in whatever format suits you. Name them "cloud1.xxx", "cloud2.xxx", etc.
3. Create a new project in AE and import your 3 cloud images.
4. Create a new comp. I made mine 720x486 D1/DV, 10 seconds long. We'll call it "cloud comp".
5. For ease of this tutorial, let's put "cloud1.pct" in layer 1, "cloud2.pct" in layer 2 and "cloud3.pct" in layer 3. You might notice that the clouds don't quite fit. Scale them to the size of the comp.
6. Let's start with Layer 3, which contains "cloud3.pct". Apply the Offset filter to this layer - Distort > Offset. In the first frame, keyframe the value to 0,0.
7. Go to the last frame, then one more frame so that you are past the end of your comp by one frame (you should just see gray). You'll be at 10 seconds, not 9:29. Set this keyframe to -512,512. By setting the keyframe after the last, you are guaranteeing that it will loop seamlessly if you want to loop the water for minutes or hours.
8. Keep "blend with original" setting at 0.
9. Now to Layer 2. Apply offset to this layer too. Set the first keyframe to 0,0. Set the keyframe at 10 seconds (the one after the last) to 512,512. Set the layer mode to Difference.
10. And Layer 3... Apply offset to this layer. Set the first keyframe to 0,0. Set the keyframe at 10 seconds (the one after the last) to 0,512. Set the layer mode to Difference, as well.
11. Create a new comp called "Displacement map", for lack of a more creative name. Make it 10 seconds long, 720x486, just like the last comp.
12. Drag your "Cloud Comp" into this comp. Apply the displacement map filter - Distort > Displacement Map. It will default to using itself as a displacement map and this is what you want.
13. Set the Maximum horizontal and vertical values to whatever you like. The closer the number is to zero, the less distortion you'll have. I chose fairly low numbers, because when they get too high, it's too choppy for my taste. I used luminance values for each, and again, use what you like. Take a look at them all, some will yield different results.
14. Make sure "Edge Behavior" is ON.
15. Add an adjustment layer to color your water. Layer > New > Adjustment Layer. Apply the colorama filter to the adjustment layer. Effect > Image Control < Colorama. I used the preset of "Caribbean" and tweaked the colors to add some seaweed.