Here is a project file with a simple water mechanics I've been prototyping for a client. Eventually we used a bit different approach with our game and I've decided to share it.
The idea was to make a smooth and seamless looking water with easy controls over the waves (how fast they can move and how high they can reach).
Mechanics are quite simple. It's using Canvas plugin by R0J0hound to draw bezier curves between points (Sprite objects) spread horizontally across the layout. Each Sprite object have sine behavior to control speed and height of the waves.