Altered Lie in a water hazard

During the play of the 18th hole in the second round of match play at the US Mid-Amateur, a player hit his second shot way to the left.  It actually was on the far side of the lake from the green.  It was in the hazard.  He and the official got over there and after shooing away a small alligator found a ball plugged in the muddy bank.  Evidently the ball had spun down into the bank and then somehow spun part way back up so that it was suspended about half way down the hole.  The player needed to lift the ball to identify it.  When he did so and attempted to replace the ball, it fell all the way to the bottom of the hole.  Since the lie of the ball to be replaced had been altered, they had to find the nearest most similar lie.  There was another small hole nearby that they were able to put the ball into and have it about the same depth below the ground.  He chose to hit it rather than take the penalty and go back.  From there he hit it into the water and conceeded the hole and the match.

Remember that, with the exception of a ball in bunker, if the lie of a ball to be placed or replaced is altered, the ball shoudl be replaced in the nearest most similar lie within a club-length.