Hello John,
Here is a hyperlink to the data sheet of a 380 motorwhich will be similar to yours.It contains tabular and graphical data but it is the Current Vs Torque graph which explains all really.
http://docs-europe.electrocomponents.com/webdocs/0273/0900766b80273327.pdf
The motor is maintained at a constant voltage and the graphs show what happens to efficiency,rotational speed and current drain as the load torque increases.
The graph is missing the output power curve which ais parabolic and peaks at the 50% efficiency point.
When you are out of water the motor is rotating at high speed but it is not drawing a lot of current from the batteries
When the prop is immersed in more viscous water the lorque on the motor increases so its rotational speed drops and the current rises.
In water,you have drained the batteries of power so quickly that their voltage has dropped to a level where control circuitry is unable to function.
Tom