Ok then, back to JK2 and sabers underwater... In both JK and splinter of the mind's eye (that book that takes place between ANH and ESB), sabers were used underwater. Now, as to Obi Wan's saber shorting out, if that happened in a scene that was cut from the movie, does it still count? If you think about it, there is no real reason that the saber shouldn't work underwater. It doesn't emit smoke, so it doesn't appear to be consuming oxygen. it's not a stream of fire, it's some kind of light energy/plasma beam. And light definately can travel through water.
"Weeeeeeee!!! I just accidentally BLOOOOOOOOOOWED up the droid command ship, oopsie! he he he, say whatever happened to those other 100 driod command ships we saw orbiting the planet in the begining of the movie??? oopsie!!!! he he he"
-Anakin Skywalker (future Dark Lord of the Sith)