Boat + bowling ball => level drops. 1) Imagine pushing the boat down into the lake, displacing water. The level would go up. 2) Imagine the ball instead of be

Boat + bowling ball => level drops. 1) Imagine pushing the boat down into the lake, displacing water. The level would go up. 2) Imagine the ball instead of being in the boat, is attached under the boat by a rope. Same thing. (Imagine it magically moving through the bottom of the boat - it has no impact on the boat or water level). 3) Imagine you cut the rope. The ball will fall, and the boat will bob up. Water level goes down.