As said before, as it stands right now the interior simply floods whenever we raise the water level to the proper height, and we do not have anything in the works to fix it. We would be interested in any scripters etc. who might have a solution, though.
It's possible that the effects of water can be cancelled through additional zones on the interior, but I'm not sure how one would remove the water texture on top of the water plane in just a specific area
Going the other way, you could go the "ship in a bottle" route, stick the Titanic in a "tank" made of water zones surrounding the ship.
I don't think that would allow a variable speed on the ship, though.
http://www.youtube.com/watch?v=K2b0Y8huEC0
Here's a random video of the stern's exterior.http://www.youtube.com/watch?v=qhIB9hC-qY0&feature=c4-overview&list=UUm_Md6Xk8OZtzGaXcDeGcpQ
Here's another preview of the next update: