Dymondwood is the mainstay of my handle material...it's good-looking, tough, and doesn't require all that much care.
As far as the water-tightness of buffed dymondwood, I made a buddy of mine a filet knife with dymondwood scales. He promptly dropped it in the nearby lake and mourned its loss. His son, a SCUBA diver, suprised us all by finding it some weeks later. The blade was beginning to corrode (took some hellacious buffing to get THAT ship-shape again), but the scales hadn't so much as raised grain yet! I buff it up with white compound, and let it go, usually.
Hope this helps out some.
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It's the SUSPENSE that kills me! --Bugs Bunny