Ah, the flooding problem…therefore you need another trick :wink:
The generate sea option is ok, you will have to download an extra set of coastlines, because in your extract the seacoast is incomplete.
See http://www.mail-archive.com/mkgmap-dev@lists.mkgmap.org.uk/msg10351.html

Download the coastlines_planet-latest.osm.pbf from http://fabianowski.eu/osm/coastlines/
In your mkgmap options --coastlinefile=coastlines_planet-latest.osm.pbf

This might help, otherwise the coastline could be broken somewhere inside the map and you need to fix it first.
Btw it improves the looks of the map too, because it shows more coastline & land outside the map