Greg,
I'm not sure of your monetary or time resources, yet I had an epiphany about something similar earlier this year during our SEAPerch development. I thought about using a single drive motor with a CAM shaft that moved the side fins up and down. Also, the 'fins' were made of a thin stainless steel skeleton with a flexible water permeable sheet of plastic/polymers/whatever instead of wood. I'm not sure if it's ever been done before, so who knows what the possibilities are.
If you did a single motor design, it's easy to encapsulate that into a watertight container.
Here is the project that 1885 did for our county in early 2008. We don't show how to make a watertight servo, but we do show how to make a watertight underwater motor. It stays water tight for 8-12 hours of operation, but if we used a higher-temp wax we could definitely see better longevity.
http://www.seaperchpwcs.org/
Go to Curriculum -> Build Manual -> Thrusters -> page 2-8. Hope this helps!