I have used decal paper from beldecal.com, from decalpaper.com and from Amazon. My printer is just a cheapy Epson inkjet. Did you seal the paper with a clear coat after you printed before it got wet?I tried that but I had streaks in the result. What decal paper do you use and what printer?
Have you tried changing your print quality settings? That fixed the issue for me. I use a cheap HP and paper from Amazon.I got decal paper from eBay and also used a cheap Epson printer. When printing 0.25" wide red, blue and white stripes, there were streaks in the colors, so I never even bothered to apply them on a rocket. Project on standby ever since.
Are you able to get very accurate alignment between the printed image and the cutter?I scan all of the waterslide decals then put them in a folder for future reference then recreate everything in vinyl. I prefer 651 Vinyl from Oracal. The benefits are that you have complete freedom over colors, sizing and design. Lets face it, a lot of manufactures out there don't put a ton of thought into their decals designs. If you want to reproduce a specific multi color graphic, you will first need to print it then cut it. For this I have a Canon TR8520 printer and a Cricut Maker cutter.