... the ocean might simply be good at blocking transmissions.
The ocean isn't just good at blocking transmissions. It's ridiculously good at blocking radio waves. If you work the math on this page, you can see that your basic WiFi transmission (at 2.4 GHz) will experience an attenuation of almost 1700 dB/meter! At that rate you'd get far less than a millimeter of penetration.
Even the lowest frequency short wave bands (1.8 MHz) get 46 dB/meter attenuation. It starts to get possible to receive RF when you get down in the kHz range but of course, your data rate goes to hell.
For underwater communications under a couple hundred meters or so you can use an acoustic modem. Even then, your best data rate is going to be on the order 2400 baud or less.
If you want high speed underwater communications, you gotta use a cable.
The sub uses GPS for positioning on and near the surface. The rest of the way it's using inertial navigation.
USL@NOC is also working on multibeam sonar so that the robot can assess its position using geologic features on the bottom (up to about 200m away I expect) for position keeping in a current.
I'm not sure why they'd use a multi-beam for station keeping when they already have an ADCP (Acoustic Doppler Current Profiler) on board. The particular ADCP they're using here was made by a company I used to work for (in fact, I wrote a lot of the firmware in that sucker) and is accurate to within a few tenths of a percent and can track the bottom out to 200m.
A list is only as strong as its weakest link. -- Don Knuth