I rebuilt the lake (8 x 3 feet) on my layout and built an all new mechanism to power the boats: it's still done with magnets from underneath - no slots wires or strings - but now uses a totally different approach that works that is more dependable and durable. At the end I explain the new machinery and why I abandoned the old approach.
Here is nearly everyone's favorite: a ski boat pulling a babe water-sking. The boat is a model of my #3 son's boat and the skier is a model of my soon-to-be-daughter in law.
Here is my favorite: the boat James Bond and Tatiana Romanova use to escape from Smersh in From Russia with Love - this is a scale Fairy Marine 23 cabin cruiser with the rack of extra fuel barrels as in the movie - and a tiny Bond and Tatiana figures. This boat, and the one above, are made of card stock (I used manilla folders).
Here is the only not-scratch built boat on my lake. Everyone will recognize this boat: Lionel offers it in a set of foat and in several boat transporter cars, etc.
I have about a dozen other boats including the biggest boat on the lake - John Berdsford Tipton III's 50 foot cabin cruiser. All paper.
The mechanism (upside down here) is made of two home-made pulleys, 22 and 16 inchs in diameter, which pull a 1/2 inch V belt on which is a mechanims that drags a neodymium magnet about 1/4 inch under the lake surface. The boats all have a small magnet in them, too. Power is from a with a 120V electric motor. The photo below shows the mechanism, with is extendable to any length - here is has a 120 inch belt so the oval track of the boats is about 5 feet in length. I will eventually get a 180 inch belt and stretch the oval to nearly the length of the entire lake, and add a second mechanism, much much slower, with a sailboat inside that outer loop.
I originally had a Superstreets track underneath the lake surface with trucks that carried magnets on top of them. The advantage is had is that I could arrange any type of route for the boats, even an X in which they cross over the path they took, etc. But the magnet clamping force needed to dependably trap and hold a boat to follow the mechansim was so great that it would often break and the boats would stall, or if I increased the magnet size the increasing friction would nearly stall the SS vehciles and I had to use full voltage to get the boats to move: I burned out the motor on a vehicle in about 5 hours of running.
This new mechanism appears to be bullet proof. It makes a bit of noise but that is this particular motor gearbox - its old and worn. Now that I kow what works I will get a wquieter motor.