Telas said:SRD: It can be extinguished by any means that would put out a normal fire of its size.
IMC, it weighs enough to sink in water, although it'll probably move through mud, leaving a track. Water of sufficient height (over 3 feet) will douse it, but mud won't.
Fair enough. I've edited my earlier post to clarify that I don't see the sphere's movement quite the same way. Sinking in water would put out a normal fire, but floating on water would not - thus I agree with your conclusion under your campaign assumptions.
Telas said:A Create Water spell would probably take a contested roll, adding ability bonuses and spell levels to d20 rolls, or something like that.... but at this point I'm making stuff up.
That sounds about right.