Zeke et al:
Not so much conductivity of water. More to do with the fact that the mass of water usually has a different temperature than the land adjacent to it. This means that the respective masses of air (over land/ over water) possess different densities and as such propogate the NDB's signal with differing degrees of effectiveness - resulting in a refraction of the signal usually coincident with the coastline.
Otherwise your analogy RE bending of light through water is correct. It all just comes down to the density of the mass.
P.S - 411A. I WISH NDBs were obsolete. Apart from major cities and a few big country towns, Australian airports rely on NDBs for the bulk of their instrument approaches!