Tman--Ok, this really is more of a camera settings thread so your question might warrant another thread, eh? Oh well, at the risk of a semi-hijack, here is the deal. The WP-DC28 housing does indeed block part of the G11
flash due to how extended the housing front needs to be to accomodate the extended lens. The lower right part of your scene is what can get shadowed. It certainly will show when using the wide angle end of the zoom, it shows less so as you zoom out (make the scene appear larger) because you pick up up less of that shadowed area. In macro mode or when in close (3-5'?) it isn't typically noticeable, especially when zoomed out.
If you are shooting a distant scene (say at least 10-15 feet or more) shadowing won't be a problem at any focal length because the flash would no longer be the dominant light source (except maybe on a close foreground), same for shallow water when it's bright--you probably won't notice shading problems. Also, many folks learn to plan for this when composing, especially as they begin to notice the shadow problem in some shots. They frame to avoid including the area affected or they just shoot and crop it out later. Learn not to frame the scene with anything important down at the lower right corner (which won't
always be your best bet of course but still...) and you pretty much have dealt with it. I wouldn't count a whole lot on the supplied diffuser doing much for this problem but it might help a bit.
Notice nothing has been said about "cludy" ( 'cloudy ', yes?) or distorted pictures. That's because the flash or housing won't cause these problems for still photos. With video though, oh brother--I hear the variable potentiometer runs into the same flux gate problem Nemrod warned you about with freshwater. Oh wait, ya know what? It mighta been Nemrod who told me about this potentiomter problem! I'll have to check my notes...
No,the strobe firing for a few 1/1000ths of a second will not cause any video problems. Start saving up though, you will eventually want to add some sort of light down the road I bet. // ww