Channel energy is my example here. It is a 30 foot burst. If there is a pit of water, would the effect go in the water or does the waterline break line of effect?
the appropriate section of rules you're looking for is in the environment section of the rules:
Attacks from Land: .... A completely submerged creature has total cover against opponents on land unless those opponents have freedom of movement effects. Magical effects are unaffected except for those that require attack rolls (which are treated like any other effects) and fire effects.
So, the waterline does not break line of effect, unless the burst is also a fire effect.