So, if there's a gap between the normal and inverted horizon lines, that equals the dip of the horizon? I'm trying to visualize why that would be so.



The inverted image has reduced brightness, contrast and resolution. My first thought was that:



-The inverted image is being produced by a surface which is at an angle to the source of reflected light; so the total amount of light producing the inverted image is lower than that of the normal image.



But my second thought is more significant I think:



-The inverted image is being produced by a partial specular reflection from the water surface. Only some of the light is specularly reflected, while most(?) of it is passing through. A one-way mirror. I'm not sure how (or even if) the angle affects the amount of light that's reflected.



Then the problem is made worse (for both images) by the light that passed through the water surface reflecting off the surface of the cylinder and back to the lens. I think painting that surface matte black would help improve overall brightness and contrast.



Plugging that fill hole in the cylinder would help too.



And black out the acrylic window just above the water surface with tape. From life experience a one-way mirror works best when there's a dark room behind it. Make the area in the cylinder above the water surface as dark as possible.



Edit: Looking at the photo again, it looks as if you put a baffle in the upper part of the cylinder. I can't quite make it out.