There is a type of leather that has in the past been commonly used for divers weight belts. If I remember correctly this stuff is oil tanned and pretty much impervious to saltwater immersion when retreated on a regular basis. Now take this leather and laminate it with a plastic insert using a waterproof epoxy that stays flexible and you have a sheath that will stand up to a complete soak and not loose it's shape. If you remember to oil it and keep it clean, it will last for a very long time, even in a humid environment. The thing about this leather is that it is so saturated with oil that there isn't room for the leather to soak up water. Keep oiling it and you'll be fine. If you can't find this leather, go with kydex/concealex with suitable drain holes.
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Regards
Joshua "Kage" Calvert
"Move like Water, strike like Thunder..."