This bug continues to (partially) affect the XBox 360 version (current as of 7/11/2016):
Build at the height limit (place a block at height 256) above water in Survival mode. The surface (gravel, sand, etc.) below the water will be lit at each square where a block has been placed at the height limit. The light level will decrease radially outward from each such location as if the source was the water location immediately above that block at the bottom of the water.
So far this has been tested with wood planks placed at the height limit.
If a sand block is placed at the lit location at the bottom of the water, the light temporarily disappears. Placing an additional block above that (e.g. sugar cane) brings the light back.
Bug1.JPG: Looking out from a sugar cane at the bottom of the ocean, daytime
Bug1_1.JPG: Looking out "around the edge" from the same sugar cane as Bug1, daytime
Bug1_2.JPG: Looking out from another sugar cane "around the edge" at the bottom of the ocean, nighttime
Bug1_3.JPG: Looking out through the same sugar cane as Bug1_2, nighttime