Gad Zooks, we have two 'Jim Jones' on the board (Jim here, and JD Jones in So. Oregon.)
Jim here brings up a good point .... water PROOF or water RESISTANT. Very few of the first without the use of an external case; several may be water resistant to rain even, perhaps, to 10' of 'debth.' Cost of one to the other will really vary a lot. If you want something more than 'point and shoot' (fixed lens) you'll probably have to take a good look at cameras that come with/retro-fit a fully waterproof case.
For a good look at what's available, hit the B & H Camera web site.
Second on the Olympus. They are also fairly impervious to knocking around. They market them as shock and water resistant. And the water resistance generally has more to do with pressure constraints on the working parts. So, are you looking for a diving camera, or something for pics on the water? Pics on the water are fine with the Pentax or Olympus. If you want to go deeper, then you really should get a waterproof housing.
You'll never hear any complaints from me. I've taken it swimming, fishing, wakeboarding and snowboarding rain or shine. The key word is WATERPROOF. No need for external casing and so on and so forth. It does have zoom albeit digital zoom. Takes great macro shots and photos from afar. I've taken pictures of itty bitty hummingbirds from a distance ( another hobby of mine) and it comes out crisp and clear. It also takes awesome videos and definitely below your $500 budget too.
Best of all, I don't have to worry whether how much water it can resist. And being worry free when you are out and supposed to be enjoying the outdoors is a must for me.
I've got experience with both Canon Elphs and the Pentax Optio W10...there are only very subtle differences between the W10 and W20. I have a digital Elph (canon) and underwater housing as a personal camera and a Pentax W10 for work.
All in all, I prefer the Canon Elphs w/housing overall but that's not to say that it's the best setup. The Canons offer me, personally, a more intuitive operation and I feel that it takes better photographs with better color and better dynamic range. Again, that could be me knowing how to use it better. The downside is that the camera itself is 100% NOT waterproof. That said, the cases are rated for 160 feet (or 50 meters) so you could scuba dive with it or snorkel on your honeymoon. The Canon's with dedicated housings (or Nikon, Olympus, Sony) etc. cost much more since the dedicated housings cost between $100-200.
The Pentax are, in themselves, "waterproof". There is some fine print, however...it's something like "submersion up to 3 feet for 15 minutes" or something weird like that. But that's plenty good for the accidental dunking or sticking it underwater to get a kosher wild fish shot. And they're way cheaper. I just don't feel that I get as good a photo as the end result...but I'm picky. As they say, YMMV.
I sell cameras and am a photographer and I'd say you would be better off buying something like a Canon and getting the water proof case for it. Like any of the SD serries for Canon have nice cases and you could get both a case and camera for under 500 easily....and you can't go wrong with a Canon.