I agree with Chronos.
I worked the situation out analytically, using a cube of steel rather than a sphere, for simplicity. (I’d rather not integrate the pressures over a non-flat surface tonight.)
I can’t use Greek characters, so I’ll use D to represent density. D[sub]S[/sub] is the density of steel; D[sub]M[/sub] that of mercury; and D[sub]W[/sub] that of water. We know D[sub]M[/sub] > D[sub]S[/sub] > D[sub]W[/sub].
First consider the steel cube (side length A) floating in mercury with air above. (Implicit in this is that air’s density is effectively zero. Since it’s several thousand times less, I think that’s probably OK.) Pretend that the cube is magically stable, and floats with top and bottom surface parallel to the mercury surface. The air above is at atmospheric pressure, p[sub]a[/sub].
The cube will sink by some distance L (0 < L < A) into the mercury. Balance the forces from:
Pressure on top: p[sub]a[/sub]A[sup]2[/sup]
Pressure on bottom: (p[sub]a[/sub] + D[sub]M[/sub]gL)A[sup]2[/sup]
Gravity on cube: D[sub]S[/sub]A[sup]3[/sup]g
Balance these (top pressure + gravity = bottom pressure) and solve for L, to get:
L = A * (D[sub]S[/sub]/D[sub]M[/sub])
In other words, the cube sinks into the mercury by a fraction of its own height proportional to the density ratio. That makes sense - if D[sub]S[/sub] were zero, it wouldn’t sink at all, and if D[sub]S[/sub] = D[sub]W[/sub], it sinks in all the way (neutral buoyancy).
Now imagine that we dump water in - enough to cover the steel cube completely (as it turns out, once it covers the cube, how much water doesn’t affect the result we’re after.) Say that, after things settle down, there’s a water depth of X above the surface of the mercury, with p[sub]a[/sub] above the surface of the water. How far does the steel cube sink into the mercury now? Call that L[sub]2[/sub].
It’s a bit more complicated, but we can still just balance the pressure and gravitational forces:
Pressure on top: {p[sub]a[/sub] + D[sub]W[/sub]g(X-A+L[sub]2[/sub])} * A[sup]2[/sup]
Pressure on bottom: {p[sub]a[/sub] + D[sub]W[/sub]Xg + D[sub]M[/sub]L[sub]2[/sub]g} * A[sup]2[/sup]
Gravity on cube: D[sub]S[/sub]A[sup]3[/sup]g
Again, balance as before and solve for L[sub]2[/sub]:
D[sub]S[/sub]-D[sub]W[/sub]
L[sub]2[/sub] = A * -------
D[sub]M[/sub]-D[sub]W[/sub]
Happily, this degenerates to the result we got without the water if we set D[sub]W[/sub] to zero, as it should. Actually, I could have just skipped the first derivation and gotten it straight from here.
Anyway, what does this show? That the steel cube will rise slightly. Looking up the actual densities :: rummaging ::, I find: D[sub]W[/sub] = 1 g/cm[sup]3[/sup]; D[sub]S[/sub] = 7.86 g/cm[sup]3[/sup]; and D[sub]M[/sub] = 13.546 g/cm[sup]3[/sup].
This means that L (no water) will be 0.58A, and L[sub]2[/sub] is 0.54A.
Add water, and a steel cube will rise by about 4% of its side length. A steel sphere will behave similarly, although the math to show it would be a little more involved.