Old file with some tricks and cheats.
The "wave" animation was achieved by noise modifiers, bone parenting w/delays, a mesh deform, and some small planes with softbody physics and duplivert abuse. The BG "fog" is also just a few layered procedural textures, keyed. No detailed physics sim. The model uses the old (inaccurate) fake translucency shader. Not true SSS. Pretty slow, pretty unoptimized, but pretty.
The description of those methods is not thorough and not 100% accurate. It's been a few years since I combed through this file. Just dumping this here instead of updating to 3.x. It is out of date so probably not worth the effort.