Your description reminds me of a story I read in The Magazine of Fantasy and Science Fiction called Polyphemus by Michael Shea. It got the cover of that issue.
I don't remember much about it, but your brief description made me think of it, and the cover illustration makes it seem like it could match.
The story has been anthologized a few times. In fact, when I looked at that link, I realized I have the story in The 1982 Annual World's Best SF, so I re-read it. Now I'm a little more confident in the identification. The "body of water" you mention is a lake inside a volcanic crater.
It was a titanic eye - a transparent orb of gold, intricately veined
within, the pupil a scarlet rhomboid into which five sand-hogs could
have been driven abreast. Deep in the yellow ichor, black shapes
moved, whole constellations of them swarming through the kelp-like
jungle of veins, while outside the globe, round its base, a collar of
huge tongue-like tentacles stirred, stretched, and licked the air.