Yeah that happens..... Best advice would be try a Vacum bag or a couple of Condoms.....take it down 15-30 feet and see if it will work. Water proofing is easy, but the screen is pressure activated by your stylus. The water pressure may warp the screen and/or the case, so a small ridged frame or tray made from a PVC end cap or a cut down and de-burred electrical juncton box may be needed.
IMO I would pick up a cheap refurbed Palm Zire for $50 From Palm One to experiment with instead of risking my nice model. Even though it would be "cool" to take it down, there are no real practical applications you could use underwater. Note taking with Graffiti on a palm is tough enough on dry land...Constructing your own DIY Wetnotes or a slate is easier and less expensive because if they spring a leak you wont lose your data...
There have been a few Ideas posted here.....Have you tried any of them yet???
*Sidenote* did you try that Excel divelog I PM you????