Instructions
Proceed through the game until you've reach day 4 and unlocked Bottumsup Bay.
Go to Bottumsup Bay and speak with Beth, who's waiting by the water. She'll give you scuba gear. Once you have it, you can dive into the bay.
Swim forward until your find Rosie. She's being harassed by sharks. Swim to her and talk to her, avoiding the sharks. If one touches you, you get teleported back to the start of the level. Once you talk to her, she joins your party.
Continue swimming forward. When you can, veer left. You'll find some coral here. Use your drill on it to break it apart.
Swim through the hole in the coral. You'll find the sunken ship straight ahead.