I think the real world is somewhere between Bear Islander and Orion. First of all, there are plenty of submersible 120v devices that are very safe when wired properly and used properly. Many underwater swimming pool lights are 120v, many sump pumps are submersible. But you can't count on the water for a safe ground. Fresh water is less conductive than humans. So if your swimming in fresh water and the electricity is traveling through the water, it can travel through you instead of the water.
My original point was that cutting off the ground lug was a bad idea. It's a safety feature, it doesn't provide absolute protection. Removing it cannot help you.
http://www.recreonics.com/hayward_underwater_lights.htm