For the full rules of Golf, please visit the R and A site.

Apart from being a little wet, Water Hazards are defined by
both Yellow and Red stakes. What do they mean?

• Yellow: Used to define standard water hazard from which you have two options, both incurring a one stroke penalty. (Example - Hitting over a stream or pond lying across your shots path)

1. Play another ball from where you last played - (stroke & distance)

2. Drop a ball as far behind the hazard as you want, keeping the point where the ball last crossed the hazard line between you and the hole.

• Red: Used to define a Lateral hazard from which you have four options, all incurring a one stroke penalty. (Example - Hitting beside a stream or pond lying along side your shots path)

1. The same as above

2. The same as above

3. Drop a ball within two club lengths of where the ball crossed the hazard line, no nearer to the hole

4. Drop a ball within two club lengths of a point on the opposite margin of the hazard the same distance from the hole as where the ball last crossed the margin, no closer to the hole

The above is an excerpt from Australian Golf Digest by John Morrissett, USGA Rules Official

(NB. Should the ball embed on impact when dropping, relief is allowed under Rule 25/2)

And yes, 'through the green' you are allowed to clear any loose impediments
from the area in which you are preparing to drop the ball.

Examples of Water Hazard & Lateral Water Hazard