Engage The Caterpillar Drive

According to this article in The New London Day (annoying registration required after today), Electric Boat won a $20 milllion contract from DARPA to research "shaftless propulsion" for submarines:

"The 18-month contract was awarded by the Defense Advanced Research Projects Agency, or DARPA. Electric Boat, one of two defense contractors to compete for the award, will lead a team of smaller companies and academic institutions that will work on the technology that allows a submarine to operate without a propulsion shaft that penetrates its hull.
“This (shaftless propulsion) has a really good shot at being the future of propulsion (for submarines),” said Robert A. Hamilton, the shipyard's spokesman. “We're certainly hopeful.”
Submarines now use a direct-line propulsion shaft to a large propeller.
“This would allow us to put propulsors anywhere on the ship,” Hamilton said. “It allows more options for us in terms of a ship's configuration,” he added.

The EB press release is here. I've always heard rumors that this stuff was possible; it'll be interesting to see what they can come up with. Getting rid of the whole shaft system would really revolutionize submarine design.