Yep, I think ocean when I think waves, and I think waves when I think ocean.
If you believe the clue at all I'd say it is a waste of time to look in any
bodies of water other OOT, Erud's crossing, and possibly Dagnor's and Lake
Rathe.

As far as OOT, there is the hill giant Gronnit <sp> that stands in the water
near Pirate Isle, viewable from the boat. If you watch him a while he'll
walk up on shore and stand around very briefly before walking back. I always
thought it'd be neat if he were standing on something there in the water and
you could sneak over and steal it when he was away. Check it out if you are
near the island, and check again at another time because the item may not
always be spawned. Interesting idea at least <grin>. FYI there is an evil
Gnome Pirate there that is part of an Ak'Anon enchanter quest, so the whole
thing is not *totally* un-related to Gnomes.

Also, FYI, there is indeed a high level, aggro NPC in the underwater cave in
Everfrost (north side under the west river fork). The cave is very, very
dark, and also quite large. There is a glowing room with the rod for the Ice
Comet quest in a little shack surrounded by ice bones. From there take a
left I think and hug the right wall and you'll see him, a guy named
Mc<something> standing next to a little goblin diver. I think he was a
barbarian or human, but did not get close at all. In any case he conned red
at L29 and was aggro to my usually-lovable agnostic barbarian warrior. I
have heard rumor that he is L35. I have never heard of him being killed, so
cannot say what he drops; not many people even seem to know he exists. I
doubt that he is related to tinkering, but would be a fun fight so go kill
him anyway <grin>.

-Lenn