Another good way to define the waterline of a ship model is to use one of the laser tools now being sold in hardware and homeowner stores. Sears has one for about $35.00; I notice MicroMark is selling one for less than that. Black and Decker also has one.
Such a gadget emits a laser beam in the form of a half disk, which shows up as an absolutely straight line on anything it hits. The manufacturers market these things as tools for lining up studs, hanging pictures, painting stripes on walls, etc., but they have several uses in ship modeling. Set the beam on horizontal, put the model in front of it, and it will shine a perfectly straight waterline on the hull. Set the beam on vertical and it will be a great help in lining up masts.
The only trick is that both the gadget and the model have to be level. The gadget has a pair of spirit levels built into it, and threaded adjusting feet. The model needs to be sitting on something solid that can be adjusted (with shims made from scraps of wood or paper) till it's level as well.
Youth, talent, hard work, and enthusiasm are no match for old age and treachery.