Yabbies are a kind of small crayfish that are native to
Australia. There are lots of yabbies in our dam & eradication isn't an
option. Unfortunately according to the garden nursery they can apparently be
very destructive & dig up tubers, eat leaves/flowers, etc of water
lilies. So we need to come up with some form of protection for the
lilies. The only idea we've had so far was to buy some wire or mesh,
with holes small enough to let water through, but not yabbies. Then to
make into a kind of giant bowl and put it into the dam... and plant
the water lilies in big buckets (with small holes drilled to let water
through) inside the wire bowl. The wire would need to protrude a bit
the water level at least a bit, so as to stop the yabbies just
swimming over it, but hopefully it wouldn't look too noticeable from a
distance.  Does anyone have any other suggestions?

Hi lynetter,

Ok, here is what I have come up with after researching your question. 
It seems people grow water lilies because they are good for yabbies
(besides providing food, the leaves provide shelter as well) but there
is little about how to protect the plants from the yabbies!  Have a
look at this floating planter (3/4 of the way down the page)-

Free Floating Island Planters
http://www.webbsonline.com/catalog/acc/

"With the construction of some netting to deter hungry birds and
yabbies, the water lilies flourished and Nymphaea Lake was restored to
its full glory"
http://www.rbg.vic.gov.au/__data/page/1038/FloreoAutumn02.pdf

The planters are designed so that the pot sits close to the surface of
the water, but perhaps you could modify this idea to suit your needs.
Construct a floating collar with netting attached so that the netting
hangs to the depth you need. Plant your water lilies in pots (planting
instructions below) and put the pots inside and at the bottom of the
netting. Presto, the plants are protected from the yabbies but can
grow up to the light freely. I've copied and pasted some relevant
section below but please click on the links for full details (the
links are not all Australian, I picked them for their information and
not for places to order from).

How do you make a floating island planter?
http://forums2.gardenweb.com/forums/load/ponds/msg0810482413192.html?13

"Plastic pots are the primary choice for planting aquatic plants. This
is the best choice for larger plants. Large plastic pots the only
choice for getting the best results out of fast growers that bloom and
need soil ( cannas, lilies, lotus, etc.).  ...These lily pots are
thick, they have handles, and they don?t degrade in the sunlight. Lily
pots are also shorter and wider which makes them easier to place in
shallow areas around the pond."
http://www.absoluteaquatics.com/aquaticplants2.html

Planter Waterlily 40cm round
Floating ring only - large
http://www.clearpond.com.au/acces-midd.htm

For water lilies use the largest shallow pot you can. The larger the
pot the more room your lily has to grow.
[see graphics and potting instructions]
http://www.pondplants.biz/Tips.html

Pot-02 	1 Gallon pot   8 x 5 5/8
good for small lilies and bog plants 	
Pot-03 	2 gallon squat pot   10 x 8
good for large lilies and bog plants 	
Pot-04 	4 1/2 gallon pot   16 x 7
larger lilies, bog plants, small lotus
http://www.pondplants.biz/Supplies.html

see, Fabric Pond Pots
http://watergarden.com/pages/plant_care.html

"Plant lilies into a bucket of rich soil and put a 5cm layer of gravel
over the surface to prevent the plant from being uprooted by fish and
yabbies. Bury a fertiliser pellet wrapped in a piece of old cloth in
the soil twice a year to keep the nutrients up without poisoning the
water."
http://www.burkesbackyard.com.au/magazine/your_climate/your_climate2 

WATER IN PERMACULTURE
Pamphlet XI - Page 1
They include all your so-called water lilies. The best way to plant
those is to take a bag of manuring materials, tuck it into a good old
tire, punch the tire in two or three places, and push it out with the
water lily root buried in the bag inside the tire. It will come out of
the tire and be out of the bag and constrained by the tire. You can
always get it out again as a pond plant, and harvest it easily. That
works well.
http://www.churchofdeepecology.org/perm09.pdf

I enjoyed the challenge of your question, it has been very
interesting. If you have any questions, please post a clarification
request and wait for me to respond before closing/rating my answer.

Thank you,
hummer

Some of the search terms used:
yabbies australia water lilies waterlilies planting pots baskets
floating planters protection protect netting mesh

thanks so much, this is really helpful.