Unless I misunderstand, your depth is decided by the unseen waveset geometry -- the less it is offset on the Z-axis, from the object centre, the shallower the water is and the more transparent it will get (unless you swap start and end values ;), so you will need to make it more or less follow the ground, rather than using a simple plane - the depth could be seen as an alpha here.. :P
A bit of clarification, would be appreciated, if anyone feels inclined/confident: does this mean that opacity/reflectivity/wave_height is decided by the geometry strictly perpendicular to the surface, rather than distance travelled dependent on viewing angle, as one might expect for the first two?
Ah, also: what is the terms regarding Z-sorting here? During my first and only attempt so far, I would see through all the way down to ZOffs=0, for stuff on the opposite side of the surface, regardless of the ZOffs of the material I slapped onto the waveset object...