ORIGINAL: forklift
If your ship's armament is capable of firing 5-6mm projectiles, check into airsoft paintballs. You can tell when the ship is hit and you don't have to have it sunk and lose all that money.
Set a limit of hits per hull section or just a limit of 3 hits per ship before she goes down. Still sporting and not dissapointing when you lose.
If you add a recovery float & line, you might not lose so many ships!
JM