I did few other things so it clips under/above water things correctly.
But it has many limitations, like problems when you use different water levels too close (water rendering will be correct, but sprite ordering not)
And, i guess, my code is one huge hack ... maybe ... but it is good as proof of concept ... or no?
Anyway, if you consider it usable, here is diff (with example wad): http://zdoom.ic.cz/zdoom/trwater.zip (diff made from revision 2288)
And here are some screenshots (and yes, all are made in software mode, no stacked sectors used):
Spoiler: