Uh Oh! There seems to be a problem when making levels from scratch.
I've been researching this and I find this odd. When I paste levels in the ORIGINAL level offset where you set the layer 2 underwater background, it's position changes. Other level offsets is just set it way too high!
I don't know how it works but change the water with the 16x16 editor does not help. They are completely different graphics bank. Unless I can create it.
So far the affected levels is World 3-1, or even World 8 Battleship for future creations when the layer 2 transparent water background is not supposed to be high.
I even look for the ROM Offset level pointers where it came from but no help unless I or someone can find the main breakpoint.
Original level Water BG list
World 3 Fortress #1 Water Room (Not sure)
World 3 Fortress #2 (Both rooms)
World 3 Hammer Bros.
World 7-4? (Already set too high!)