Kirstie I dont know a lot about these as I've only just got one as a back up camera and been playing around with it, but as i understand it the underwater setting is really designed for blue water and not the green stuff we have here.
As far as the ISO setting goes when you set it manually, try and go for the highest one you can get away with 400+ and you start getting a lot of noise (grainy effect) in your pics. I try for 200 or less. Yes, dig out the strobe. It will widen the type of shots you can successfully take as it will reduce the amount of backscatter once you practise a bit and get used where best to place it.
Happy snapping
