Ultrasonic sensors will work with reasonable accuracy with water as the target (+- 1 inch, probably within the motion of the waves in the water anyways). Having a data line, and more notably a power cable that long IS an issue. The edges of the pulse the sensor sends back need to be sharp (a slow rising edge would shorten the recorded time for example). Also, noise could be an issue with cables that long.
The bigger issue, however, is with power. Those ultrasonic sensors draw upwards of 2 amps when they take a measurement. Because of this, the resistance between the power supply and the sensor must be minimized. To solve this, a 'huge' decoupling capacitor (probably hundreds of micro farads with smaller caps in parallel) could be used near the sensor, and it would have to not sample too often. If you want to improve the signal integrity, and solve the power issue, it might be smart to have a separate power supply at the sensor, as well as a second microcontroller. This microcontroller would control and read the sensor, and communicate with the original microcontroller either wirelessly, or with a UART or something.