Currently, I'm making a swimming robotic snake like this one using this method.
I've read that people have successfully tried and used the condom method (wrap your servo motor in a condom, basically) but my condom broke : ) when I tried it.
Step 1: Materials
Auto marine sealant (DAP works well but another silicon sealant will also work)
o-ring, like this one : EPDM O-Ring, AS568A Dash Number 007
Step 2: Seal the Seams
(Note: In this photo, I am using a bathtub & tile silicon sealant but it adhered way worse than the silicon auto/marine sealant)
Step 3: Hang Them to Dry
Step 4: Unscrew the Servo Horn
Put it to the side.
Step 5: Lube Up the O-ring and Slip It On
Lube up the o-ring and the servo motor shaft, and put the o-ring on.
Step 6: Put Back on the Servo Prop or Horn
Screw it back in, and you have a watertight servo motor!
Now, make a Robo-Snake!