How do YECs interpret waters above the expanse in Genesis 1?

Vardiman and Humphreys have a theory consistent with YEC. The waters below refers to the Earth, while the waters above refers to the primordial matter, initially water, which was stretched apart and separated from the Earth and Solar system.

The great mass of the Waters above caused the water to undergo fusion and other reactions, generating the heavier elements. The stretching event and the great mass distorted time due to relativity, creating a central place of "achrony" where time did not pass. The earth was inside this region initially. Thus the waters above expanded out during the stretching. Eventually, the region of achrony shrank until it disappeared.

As a consequence, a few days passed on Earth, while billions of years passed for the galaxies. That makes the Earth young and the universe old, but both were created on the same day.

See the article here:

Part 1: https://www.icr.org/article/new-creationist-cosmology-no-time-at/ Part 2: https://www.icr.org/article/5830/ Part 3: https://www.icr.org/article/5870/

In 1968, at the age of seventeen, I read Morris and Whitcombe's 'The Genesis Flood' and found the explanation of a 'water canopy' very satisfactory and discovered that many others, at that time and previously, had also found it logical. During my twenties I learned Advanced Analytical Chemistry and in my thirties I became a Licentiate of the Royal Society of Chemistry and in my forties I worked with radioactive isotopes and with DNA components, training further in Molecular Biochemistry.

The earth is protected by the gas giants, Jupiter and Saturn, whose combined gravitational field, together with the gravity of the moon, keep us - largely - protected from asteroids and comets, except in rare cases (Tunguska, 1908, and Chelyabinsk, 2013) when significant events (I would call them judgments) bring material to our planet at high speed causing kiloton or even megaton explosions in the atmosphere and causing damage on earth. The asteroid belt between Mars and Jupiter is where the collected items orbit after gravitational capture.

The Kuiper belt and the inferred Oort cloud are also protective 'layers' at further distances from Earth.

But what is missing is protection from cosmic radiation, the high energy radiation which affects airline cabin crew (whose lifetime radiation dose is about two or three times more than the general population) and affects every dweller on earth.

And God ... divided the waters which were under the firmament from the waters which were above the firmament. And God called the firmament 'Heaven'. Genesis 1:7,8 KJV.

Spiritually, this has profound meaning regarding creation, as such. It is a profound expression regarding 'waters' which elsewhere are called 'seas', the imagery conveying spiritual truth. The words also have bearing on what happened on earth, subsequently, by the judgement of Almighty God.

... by the word of God the heavens were of old, and the earth standing out of the water and in the water: II Peter 3:5

My own understanding is that water descended from above in the days of Noah which, as water vapour above the planet, had protected earth from cosmic radiation. The loss of this 'water canopy' explains the subsequent rapid decline in human longevity, as detailed in Genesis 11, from almost a thousand years to barely two hundred.

The antediluvian climate would have been mild, temperate and humid, all conducive to human good health and longevity, the loss of which was, also, deleterious.

Cosmic radiation is gamma radiation and x-rays from such sources as neutron stars and is highly damaging, genetically and physically.

But there is another judgment, apart from the water loss and the significant alteration in climate - a judgment that is unseen.

God spared not the angels that sinned, but cast them down to hell (tartarus, the abyss) and delivered them into chains of darkness, to be reserved unto judgment ... II Peter 2:4 KJV

Principalities in the heavens, who had rebelled, were not spared and were deposed. But their very existence is that which holds the creation together. And their subsequent deposing had physical effects on matter itself.

God spared them not and God relinquished part of the order within creation which had subsequent effects on humanity. It was another, consequential, effect of the necessary judgment on antediluvian humanity and on the 'sons of God', Genesis 6:1-4, who had 'left their first estate', Jude 1:6.

My understanding is that their enforced confinement caused a loss of material control and caused the instability within matter which we call 'radioactive decay'. That is why isotopic abundance cannot be used to determine time events before the Flood. And further explains the reduced longevity of humanity exposed to radiation at ground level (as well as cosmic radiation from space).

As a Licentiate of the Royal Society and as a Christian I find these statements quite logical. But I do not probe into mysteries. It is not my place to do so.

I find it better, and safer, to be obedient, in faith, and only to go as far as the word of God permits in understanding, and in stating, truth.

As commented, there is the matter of 'the fountains of the great deep broken up', Genesis 7:11, but I have not covered that as it is not in the question, as stated.