How would you even describe something like that? The arrow lazily floats towards the sahuagin king as he makes his speech, then at the presentation's conclusion, the sahuagin king yawns...thereby causing him to swallow and choke to death on the arrow that happened to float near the immediate vicinity of his mouth. :P
I would probably describe the arrow, as it expends the last of its energy, puncturing his eye.
Not like that takes a lot of inertia.
I'm going to have to play devil's advocate here. I don't think I'm a fan of shooting something 1,100 feet away underwater with a bow, and I suspect there are rules somewhere that stop that -- but technically, not being able to see further than 320 feet away doesn't actually prevent you from taking the same shot. It just applies a 50% miss chance if you still manage to select the right square.
If you're bent on using RAW then you know how it's going to work, but my vote is for making a common-sense adjudication. If an archer fires a regular bow through regular water at an extreme distance, it's going to fail. If you want a hard-coded mechanic on why, you can say something like -- firing through water changes the range increment of your weapon to 5 feet. Every 5 feet applies a -2 as normal, but now you can't effectively target creatures more than 10 squares away.
Compared to dry land, I imagine that underwater assassins are much more about close-range camouflage and ambush than distance, perhaps with extra emphasis on 'oh god they see me run run run.' Snipers wearing a kelp ghillie suit, firing a weapon from 50 feet away, breaking a capsule of octopus ink and darting away when pursuers close in.
I think I just invented the undersea branch of the Red Mantis?
Edit: Expect to see the Red Crab Assassin come to an internet near you during Superstar 2013!
Houserule wise I might say something like you also take a minus two to damage per range increment. Manly to simulate the loss of power due to water resistance.