Would it be alright to create our own waterproofing on a thermistor? As far as I know the rules states you can not use preconstructed ones which I assume allows you to make your own?
Yes, this is allowed. In fact, the event expects you to have waterproofing: in competition, the event supervisor will be testing the durability of your device by submerging it underwater. As part of your design log, you'll be describing how you made your detector waterproof, so this will help the event supervisor to tell that you made the waterproofing yourself and that you didn't use a thermistor with waterproofing already applied by the manufacturer.