Re: water. Nic isn't in a position to see the entrance hall; there's no water visible in the big chamber. It sounds like a lot of water coming in, though.
Attacking twice: yup, there are a few ways to do that. The first is an All-Out Attack (Double). Two full attacks, but no defences.
Or you can do a dual-weapon attack: hit with both rapier and dagger at -4 each, normal defences. But your left hand would have another -4 because you don't have off-hand weapon training.
You can default Main-Gauche skill from Rapier, though, so the dagger is at skill-13 before the penalties. Still down to 5 after the -8, though.
The third (and probably best) option is a Rapid Attack: two attacks (can be with the same weapon) at -6 each but normal defences. Your effective skill is 16 with the new rapier (before the -6) and you still have -3 due to dazzle (so down to 7), but you could make them Telegraphic Attacks for +4. Or wait for the dazzle to fade and roll vs 10.