I use Bels decal paper with a Lexmark printer and The Krylon acrylic clear. I have found that I have to use 3 fairly heavy coats of clear.

The water seepage problem your having sounds like it is not fully sealed. If there is any part of the topcoat that water can get through, it will, and ruin the decal.

I have started printing little test squares on my decal sheets and I dip those first. If I get any bleed through, I give the sheet another coat of clear.

Make sure you don't cut the decal too close to the printed image so that you break the seal.