[Chris_Byler]

First of all, fortifying some coastal provinces (or all, if you have the time and gold) can help with the raiding problem. To strike back, though, you'll need some waterbreathing troops or items.

Indies can also help a lot - jade amazons have water, a type of site-based enchantress that comes from a couple of nature sites has random elements.

Some constructs are amphibian or poor amphibian, so one water-breathing mage (including some summonable undead mages, if they have non-Death magic skills) can lead a bunch of Crushers into the sea. However, mindless constructs have the same problem against R'lyeh as mindless undead - the one guy with the mind takes all the mindblasts.

If you can't get anything else sooner, Faerie Court can get you an air mage, which you can then use to Auspex for air gem income and eventually forge some breathing items.