RE: Torpedoes?
Not at a club event. Pyrotechnics are prohibited. Period.
But, then again, a 7' sub is larger than the scale used by most combat clubs (in the most common, 1/144, that is bigger than a battleship), I believe, so wouldn't be allowed on the pond at a club event anyway (except by permission as a demo event).
Of course, nothing (other applicable local, state, and federal laws and ordinances, and, of course, safety) prevents you from building such a system. However, I would be cautious of the legality and safety of building an explosive device.
As far as I know, none are for sale from any source.
Cheers,
Wreno