Now let's add our aquatic monster. Open the file "Dragon" and press copy/paste the dragon in our scene. Place the dragon underwater as shown below and lower the opacity of the layer to 34%.
Add a layer mask to the dragon layer and hide the lower regions to add more to immersity.
Create a new layer and set the blending mode to Overlay. Paint with a round soft brush at 20% Opacity with black and white over the dragon to both darken the already dark areas and lighten the light areas. Clip this layer to the dragon layer (Alt-click between the two layers in the layers palette) to restrict our overlay painting flow outside the dragon.
Create a Hue/Saturation Adjustment Layer (Layer > New Adjustment Layer > Hue/Saturation) and clip it to the dragon layer. Drag the Hue slider to 133 and the Saturation slider to 25.
Make a new layer and set the blending mode to Color Dodge. Paint with a white round soft brush some specular highlights on the areas indicated below.
On a new layer set to Color Dodge paint with a light blue (#377672) over the dragon's head to boost the luminosity.
Create a new layer and paint with whatever color you like inside the dragon's eye.
Double click this layer to open the blending options window and use the following settings to create a glow and an inner shadow.
Create a new layer and paint with black a thin iris inside the eye.
Let's change the color of the eye. Group the iris and the eye layers (select them both Shift-clicking and press Ctrl + G) and change the blending mode of the group to Normal. Create a Hue/Saturation Adjustment Layer and put it inside the eye group. Because the blending mode of the group is set to Normal and not to Pass Through whatever adjustment layers we put inside will only affect the group.
Let's improve the color of the teeth. Create a new layer and change the blending mode to Overlay. Paint with a 30% round soft brush with white over the teeth.
Make another layer and set the blending mode to Overlay. With the same white brush paint over the fang-like extremities of the dragon.
Import the bubbles brush and on a new layer paint some bubbles rising from deep below and some rising from the nostrils of the dragon.
Open the file "Rock" and make a selection of the rocky island. Copy/paste inside our document and place it as shown below.
Add a layer mask to the rock layer and hide the bottom region as I did in the image below.
Create a new Curves Adjustment Layer and drag the curve down to darken. Clip this layer to the rock layer.
Create a new Hue/Saturation Adjustment Layer and drag the Saturation slider to 25 and the Hue slider to 182. Clip this layer to the rock layer to make the rock blend with our overall hues.
Create a new layer and change the blending mode to Overlay. Clip this layer to the rock layer and paint with black over the left side of the rock. Now change the color to white and paint over the right side of the rock. By doing this we will match the rock's color with the overall lightning.