Solution

Our solution was to modify the existing design to make it more accurate. To do this, we used the following circuit for each individual level.

When the water level goes up and reaches two contacts the transistor is turned on and conducts current from drain to source across a pair of resistors (R3 and R4). This MOSFET design eliminates the inaccuracies due to different water conductivities, and instead gives us distinct levels based on the resistor R3. The lowest level has the smallest R3, and with each subsequent level having an increased R3 based on the desired increment level, determined by the difference between R3 and R4.

Below is a picture of our prototype using n-channel MOSFETS, and a video showing it in use:

http://www.youtube.com/watch?v=JCtOH4qqDNE

After showing this prototype to Axys, we discovered a problem we had not anticipated. The current between the positive sensor contact and the buoy wall was large enough to produce hydrogen from electrolysis. The solution was to switch to the p-channel MOSFET circuit shown at the top of the page. This limited the current in the water to just nanoamps.

Full design report can be found here.

Interim report can be found here.