Man, hate when that happens.
The wet wood or wood not completely cleaned statement of
@rgranger seems most plausible.
There are different types of varnish. Oil and water do not mix well. I have had best results with the Total Boat products.
Gleam 2.0 (excellent for on deck wood - oil based clean wood, use a rag with denatured alcohol as final cleaning before first coat. Repeat coats every hour up to 3 a day no sanding.)
Halcyon Water-Based Marine Varnish
A durable one-part water-based marine varnish dries to a UV-stable, gloss finish that accentuates the wood grain and improves clarity—even after multiple coats.
I am using it inside to give new life to the internal woodwork of my boat.