Ok, here goes then. 3 files attached, and an obj for the fish base model.
1 - The gummy approach comes closest to what I'm envisioning, but as you can see the mesh gets all screwed up now and then. Nevertheless, it reacts nicely to the twitching, jumping up in a somewhat natural manner.
2 - The reststate approach is more of an illustrative base file, where I tried to make the cloth solver react to a changing reststate. Impossible, it seems, but I'd love to be proven wrong there

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3 - The springs approach holds some promise – I'm ‘squeezing’ two places on the fish's body together there, hoping that the body will bend naturally. But this takes a lot of tweaking and before you know it the simulation gives up. Also, you have to use two spring constraints, one to counteract the other so the fish doesn't fly off into space

. In all, a method that will probably require way too much tweaking to be feasible (imagine having 8 of these fish interacting

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There's some crud from failed experiments in this last file too, please ignore

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The reason I'm trying the simulation approach at all is because I'm investigating in how far Houdini wil be able to help us with an upcoming project – which as you might imagine isn't about a single falling fish – and learn how Houdini works in the process. There's plenty of other methods, like animated RBD's, or even just particles combined with hand-animation, but I'm secretly hoping to give the thing some much-needed ‘definition’ by going for a full-on simulation approach.
Oh and thanks Soothsayer, but as far as I can tell you're just animating the mesh after the sim? The sim doesn't react to the mesh being warped, right?
thanks,
naam