first select de mug with pen tool and create a new layer and make a copy.
then star cloning out the mug and with the clone tool repair the background as if the mug doesnt exist.

this image shows the background completely

create a layer fill with color blue background and with a bubble brush create two bubbles.

start making de mug with bubbles using the liquifying tool

continue doing the same

now is the part when you create a transparent mug.
group all the bubble layers and create one layer. name it and desaturate this layer. then duplicate this layer and put it on overlay with 60% opacity.
the first desaturated mug. not the bubbles layer. put it above all the bubbles layers and give overlay with 100 % opacity.
go to the two bubbles layers. remember one is normal and the other is overlay. give to both layer a layer mask, and with a brush with different opacities apply the layer mask until it shows the background.

open your water image and put it on the mug and apply a layer mask to the borders.

put the diver image behind all layers above the background and apply a layer mask. and thats all. I hope you like it.