I think that at first he mistook her for a WaveDancer too (perhaps one of the bodies he hadn't found among the dead at Caversong?)... and bent over to see her better. Then he must have realized of course that she wasn't neither dressed nor, uhm, "shaped" like a Wavedancer (no frilly ears, webbed hands, elbow fins, legs fins, fish tail or whatever else...) and swam away a bit disappointed.
Eventually, after a little while it dawned to him that he might have found other elves... and ever since he hasn't stopped thinking about his "maiden" ;)
And lol, he has green hair? :D I thought that Haze and Salt were the only with strange colored hair (I've still to find out if Salt's hair is supposed to be silvery violet or silver in the authors mind... it looked vaguely violet in the Summer Special, but I'm betting on silver... don't know why... Salt just strikes me as the silverhaired type...)