But now the great Kevin Connolly has uncovered the full photo in a clipping detailing this challenge escape. So click on over to Houdini Himself and learn the story of Houdini's daring dive (on land)!
UPDATE: Kevin's site is now offline, but he has graciously allowed me to share his clipping here. This is the only account of this challenge that I know of. Enjoy.
It's worth noting that Houdini patented a deep-sea diving suit with an emergency quick release mechanism. No escape from the bends, however.
UPDATE 2: I can now identify this as being the week of March 4-10, 1912, while Houdini was at the Colonial Theater in Norfolk, VA. However, the exact day of the challenge currently eludes me.