STEP 1: Get an image of water, and import it to the stage. Like so:

STEP 2: Insert a new layer, and make ovals one inside of another. This is how it shud look:

Goatse, yes?
STEP 3: Delete/cut the white areas in between the lines, in a pattern that goes delete one, leave one, delete one, leave one. I added more ovals so that it wouldn't have such a big circle in the middle. do that, then select every other white part in the middle of the lines and delete them. Screen shot here:

DELETE THE PARTS YOU SEE SELECTED, K?
STEP 4: Scale the whole thing down and stretched, and also make it small. Like so:

STEP 5: Motion tween it so that it gets bigger.

STEP 6: insert a layer BETWEEN THE OVAL SHAPE AND THE IMAGE. Copy the image onto the new layer. I don't think I need to put a screen shot for that.
STEP 7: in the layer you made and put the water image or whatever you used, scale it with the free transform a little smaller in height. Easy.
STEP 8: Right click the layer with the shape and tween and select "mask"
Test movie and see the effect! Finished product: http://www.antiup.net/view/11956/
This should work perfectly. Feel free to mess around with it too.
SOME OF THE IMAGES ARE SCREWED UP BECAUSE THEY GOT MESSED UP IN PAINT.
EDIT: Ohshi
When I re uploaded it, it made it WAAAAY too slow. So uh, just raise the framerate when you do it.