I would say yes, its a good starter camera with room to grow. I had one for a couple of years and got good results once i figured out the basics. Lighting was the biggest hurdle for me with this camera.
A couple of tips that might help: the new Oly 12-50 is a much better lens than the 14-42 that usually comes with the E-PL1, with better range at both ends and quite usuable macro; the Oly housing is just OK but the Nauticam is way better in functionality and handling; and the Oly strobes are not at all useful on that camera but the Inon S2000 are a great match.
All that said, my move to an EM-5 in a Nauticam housing was a quantum leap in every way, so if you can stretch the budget its worth considering. Another option, since you will be free diving, would be a Canon S110 and a couple of wet lenses, a setup that can also produce very good results from a very compact rig.