Physical Water Surface

My first idea would be to attach an invisible static mesh to your ship, which is just responsible for generating the mesh distance fields. It sounds you’ve already tried to implement a very similar workaround. Does the Masked Water example map that comes with physical water surface work correctly? Is the water masked out in this map on your machine?

I haven’t worked with Ultra Dynamic Sky, so I’m afraid I can’t give specific advice at the moment.
I think connecting the splash effect with the water surface could be possible, the next update of Physical Water Surface will bring some functionally that could help to detect the location of the splashes.