2d Water Line in Unity. With realtime mesh construction and deformation. Just a start, no physics. Thanks to http://forum.unity3d.com/threads/141925-2d-Water and http://games.deozaan.com/unity/MeshTutorial.pdf

WaterLine.cs

// Author: Damien Mayance (http://dmayance.com)
// 2013 - Pixelnest Studio (http://pixelnest.io)
// 
// This script simulates a simple 2d water line behavior, like you see in many 2d games.
// See http://dmayance.com/water-line-2d-unity/ for further explanations.
//
// Usage: 
// - Attach it to an object
// - Then fill the "Material" parameter
// - Start the game (here it is only visible at runtime)
//
// The parameters can be modified during runtime, but for EDITOR only.
// The width and height should stay fixed during the game otherwise.
using UnityEngine;
using System.Collections;

public struct WaterLinePart
{
  public float height;
  public float velocity;
  public GameObject gameObject;
  public Mesh mesh;
  public Vector2 boundsMin;
  public Vector2 boundsMax;
}

public class WaterLine : MonoBehaviour
{
  public float velocityDamping = 0.999999f; // Proportional velocity damping, must be less than or equal to 1.
  public float timeScale = 25f;

  public int Width = 50;
  public float Height = 10f;
  public Material material;
  public Color color = Color.blue;

  private WaterLinePart[] parts;

  private int size;
  private float currentHeight;

#if UNITY_EDITOR
  private bool cleanRequested;
#endif

  void Start()
  {

#if UNITY_EDITOR
    // Remove what we see from the editor
    Clear();
#endif

    Initialize();
  }

  private void Initialize()
  {
    size = Width;
    currentHeight = Height;

    material.color = color;

    parts = new WaterLinePart[size];

    // we'll use spheres to represent each vertex for demonstration purposes
    for (int i = 0; i < size; i++)
    {
      // Create a game object
      GameObject go = new GameObject("WavePart");
      go.transform.parent = this.transform;
      go.transform.localPosition = new Vector3(i - (size / 2), 0, 0);

      parts[i].gameObject = go;
    }

    // Create the meshes
    for (int i = 0; i < size; i++)
    {
      GameObject go = parts[i].gameObject;

      // Except for the last point
      if (i < size - 1)
      {
        Mesh mesh = new Mesh();
        mesh.MarkDynamic();
        parts[i].mesh = mesh;

        go.AddComponent<MeshFilter>();
        go.AddComponent<MeshRenderer>();

        // Define vertices for the mesh (the points of the model)
        UpdateMeshVertices(i);

        // Define triangles and normals
        InitializeTrianglesAndNormalsForMesh(i);

        go.GetComponent<MeshFilter>().mesh = mesh;
        go.GetComponent<MeshRenderer>().material = material;
      }
    }

    // Small wave
    Splash(size / 2, 10);
  }

#if UNITY_EDITOR
  /// <summary>
  /// SUPER VIOLENT METHOD FOR EDITOR MODE
  /// </summary>
  private void Clear()
  {
    for (int i = 0; i < size; i++)
    {
      DestroyImmediate(parts[i].mesh);
      DestroyImmediate(parts[i].gameObject);
    }

    parts = null;
  }
#endif

  private void UpdateMeshVertices(int i)
  {
    Mesh mesh = parts[i].mesh;
    if (mesh == null) return;

    Transform current = parts[i].gameObject.transform;

    Transform next = current;
    if (i < parts.Length - 1)
    {
      next = parts[i + 1].gameObject.transform;
    }

    Vector3 left = Vector3.zero;
    Vector3 right = next.localPosition - current.localPosition;

    // Get all parts of the mesh (it's just 2 planes, one on top and one on the front face)
    Vector3 topLeftFront = new Vector3(left.x, left.y, 0);
    Vector3 topRightFront = new Vector3(right.x, right.y, 0);
    Vector3 topLeftBack = new Vector3(left.x, left.y, 1);
    Vector3 topRightBack = new Vector3(right.x, right.y, 1);
    Vector3 bottomLeftFront = new Vector3(left.x, left.y + (0 - Height), 0);
    Vector3 bottomRightFront = new Vector3(right.x, right.y + (0 - Height), 0);

    mesh.vertices = new Vector3[] { topLeftFront, topRightFront, topLeftBack, topRightBack, bottomLeftFront, bottomRightFront };

    parts[i].boundsMin = topLeftFront + current.position;
    parts[i].boundsMax = bottomRightFront + current.position;
  }

  private void InitializeTrianglesAndNormalsForMesh(int i)
  {
    Mesh mesh = parts[i].mesh;
    if (mesh == null) return;

    // Normals
    var uvs = new Vector2[mesh.vertices.Length];
    for (int i2 = 0; i2 < uvs.Length; i2++)
    {
      uvs[i2] = new Vector2(mesh.vertices[i2].x, mesh.vertices[i2].z);
    }
    mesh.uv = uvs;

    // Triangles
    mesh.triangles = new int[] { 5, 4, 0, 0, 1, 5, 0, 2, 3, 3, 1, 0 };

    // For shader
    mesh.RecalculateNormals();
  }

  void Update()
  {
#if UNITY_EDITOR
    // Size has been updated?
    if (Width != size || Height != currentHeight)
    {
      cleanRequested = true;
    }

    // Recalculate everything!
    // This should be for the editor only!
    if (cleanRequested)
    {
      cleanRequested = false;
      Debug.Log("Reinitializing water. Make sure we are in editor mode!");
      Clear();
      Initialize();
    }

    color = material.color;
#endif

    // Water tension is simulated by a simple linear convolution over the height field.
    for (int i = 1; i < size - 1; i++)
    {
#if UNITY_EDITOR
      // Objects deleted from editor
      if (parts[i].gameObject == null)
      {
        cleanRequested = true;
        return;
      }
#endif
      int j = i - 1;
      int k = i + 1;
      parts[i].height = (parts[i].gameObject.transform.localPosition.y + parts[j].gameObject.transform.localPosition.y + parts[k].gameObject.transform.localPosition.y) / 3.0f;
    }

    // Velocity and height are updated... 
    for (int i = 0; i < size; i++)
    {
      // update velocity and height
      parts[i].velocity = (parts[i].velocity + (parts[i].height - parts[i].gameObject.transform.localPosition.y)) * velocityDamping;

      float timeFactor = Time.deltaTime * timeScale;
      if (timeFactor > 1f) timeFactor = 1f;

      parts[i].height += parts[i].velocity * timeFactor;

      // Update the dot position
      Vector3 newPosition = new Vector3(
          parts[i].gameObject.transform.localPosition.x,
          parts[i].height,
          parts[i].gameObject.transform.localPosition.z);
      parts[i].gameObject.transform.localPosition = newPosition;
    }

    // Update meshes
    for (int i = 0; i < size; i++)
    {
      UpdateMeshVertices(i);
    }
  }

  #region Interaction

  /// <summary>
  /// Make waves from a point
  /// </summary>
  /// <param name="location"></param>
  /// <param name="force"></param>
  public void Splash(Vector3 location, int force)
  {
    // Find the touched part
    for (int i = 0; i < (size - 1); i++)
    {
      if (location.x >= parts[i].boundsMin.x
        && location.x < parts[i].boundsMax.x)
      {
        if (location.y <= parts[i].boundsMin.y
       && location.y > parts[i].boundsMax.y)
        {
          Splash(i, force);
        }
      }
    }

  }

  private void Splash(int i, int heightModifier)
  {
    parts[i].gameObject.transform.localPosition = new Vector3(
      parts[i].gameObject.transform.localPosition.x,
      parts[i].gameObject.transform.localPosition.y + heightModifier,
      parts[i].gameObject.transform.localPosition.z
      );
  }

  #endregion
}