Research has recently been conducted on the use of large buried chemical explosive charges for engineering excavation. Investigations in this area were initially concerned with crater formation in relatively homogeneous rock media, a process which is now well understood. However, it has become apparent that the greatest cost and operational advantages may be realized by applying the technique to rock excavation in an underwater environment. Cratering dynamics in an underwater (two-layer) configuration have not been well understood. Small-scale modeling tests and large-scale excavation projects have revealed two new factors which significantly influence underwater cratering processes: (1) early-time dynamic effects caused by the presence of the rock-water interface and water layer; and (2) very late-time water washback and slope failure effects in the crater vicinity. The report addresses the first of these two effects by means of hydrodynamic computer calculations.