A lot depends on your budget and how much you will dive and most importantly what you want from your pics. If you want to show your friends cool things you find, then compacts are fine; if you want to hang pictures on the wall then you will want something better, and if you want to win underwater photo competitions then you will want something different again. I would start with something like the EM-5 and the 12-50 lens (sort of all purpose) and see which way your photography wants to go. You will need the housing and a strobe or two and a focus light.
This will be nearly $2500 but will last for a long time.
My wife just finished a long (for her) documentary of some of the little stuff that lives in the ocean for a kindergarten class. We met the teacher on a trip to the Sea of Cortez and they decided to do a small film suitable for 5 year olds. It turned out great (we will send Steve a copy for the Fin Foundation) and the kids loved it; getting to the young ones early about the cool stuff in the ocean hopefully can get them to think about things in the right way.
That is why I suggested using a 77-67 mm step down ring (I have the Nauticam single ones for both the 67 and 77 ports) and the Saga dual flip adapter. You suggest that it might vignette but that seems unlikely since the lens itself is only 67 mm.
Based on my calculations, I think you will get 2.5 x magnification. That means that your 4 mm nudi will look like it is 10 mm. The big problem you are starting out with is that your camera doesn't really have macro capabilities. Compared to the CMC, you should see a tiny (2.5/2.3) effect of about a 9% increase.
The +25 will indeed work on the camera, but it will not allow him to shoot a 4 mm beasty full frame, the full frame resolution is like 60 mm wide and a + 25 will take that to at best 24 or so, not enough for the original requirement.
The CMC should allow you to shoot something 32 mm wide full frame by itself. The problem is that your LX100 is not a very stellar macro shooter. Adding a + 7 to the CMC should get you to something like 30 mm full frame (not a big improvement). The SAGA +25 will get you by itself to something like 30 mm full frame (a bit more than the CMC). Unfortunately the physics of your camera are the fundamental limitation to shooting something that is 4 mm across.
A lot depends on your focus distance needs. Once you get beyond +15 or so the biggest worries are DOF and can you find the critter. I think the CMC is very well designed (at least for my macro lens) and is quite nice optically. I haven't seen the Saga but always worry about CA with such lenses.
A few weeks ago, my wife and I went to Maluku Divers to do a photo seminar/class with the Underwater Tribe. Mike Veitch and Luca Vaime led a group of 8, 7 photographers and my wife the videographer ( who has listened to the f/stop, aperture story for the 20th time and keeps asking what an f/stop is) for a week of diving the muck sites of Ambon. The class was held at Maluku divers and Joe and Emily showed us great hospitality, good food and lots of great diving. Over the course of the week, we had seminars on basic shooting, advanced techniques, some basic Lightroom classes. The classroom teaching was very good, Mike is a great teacher and Luca did a fine job on the Lightroom side, but it was in the water that made this class very special. On each day Mike would take 4 of us and Luca the other 4 and worked hands on with each student during the dive. Unlike almost any other photo class, neither Mike nor Luca took a camera into the water, only a slate. They would help us think about what to shoot and how to shoot it and they did lots of looking at our pictures after they were shot, writing furiously on the slate to change this or that and try again. One thing that we worked on quite a bit is how to use high power LED lighting instead of strobes or as backlighting for shooting larger critters. After the diving they were available every day for photo critique during the afternoon when we were not diving. The diving was typical Ambon with several Rhinopias in varying colors, lots of nudibranchs both common and relatively rare, lots of hairy shrimp, one green shrimp (the very tiny one), and tons of other muck critters including the very hard to shoot shrimp that lives in the blue tunicates. Overall, we had a great trip and want to thank Joe and Emily for running a great operation, and Mike and Luca for helping us all make our pictures better and for making the whole week great fun.
Yes it can be done, I wrote a short article that is on the Optical Ocean Sales blog site about it. Of course you can do it, using relatively bright LED lighting but you can't capture action and will have little DOF control.
-2 to 2 stops on flash compensation is not manual flash control, at least in my opinion since 2 stops is only 1/4 power. Yes you can use TTL mode on the YS03 and it will work some of the time. The reason that I would like to have manual control (I too use the strobes on manual even though the camera is doing TTL) is that after a few shots at full power the strobe recycle time on the camera gets long, presumably because of heat concerns.
I don't think any camera that can set an S value in A mode, that's why there is manual mode on the camera.