Looks like you need some transparency in the water shader. It seems that you either have no transparency OR that your water object is set to cast shadows. A default lake, you might have noticed, has the 'cast shadows' checkbox un-checked, if you've used a plane object for your water, you might simply need to un-check this box in the plane.
If there are no shadows being cast by the water object, the simplest way to determine transparency distance is to hover your mouse over the lake object surface roughly at the distance you'd like to see transparency from the shore turning to opaque, this will give you a set of coord's at the bottom of the 3D preview. The 'Y' ordinate is the one to note here. keep that number in mind and then, disable the water object temporarily and hover over roughly the same spot in the 3D preview again. You'll now see a new 'Y' number beneath the preview. Use the difference between the two 'Y' numbers(the one with water and the one without) as your transparency distance in the water shader.
Here, my water object(with shadows unchecked) is at 50 metres high. The terrain beneath it where I want to see the maximum distance into is at 46 metres, so I set transparency to '1' and decay distance to '4'.
[attachimg=#]