If your camera is not level when shooting the panorama, it will have a "wavy" or dropping horizon. The most efficient place to fix this is in the stitching program (if MS ICE provides a tool for this), or afterwards in a Photoshop with a tremendous amount of effort (and a very big warp grid). Almost every stitching program I have used (I see 6 in my Applications folder) has a horizon correction feature, and they work to varying degrees, but the secret is to level the camera first and keep it level throughout the panning...
BTW, to answer your question about "what to do now" you only have to make a minor correction to get a straight horizon based on the water (hawkeye is right, that is a hill on the right). If you look at the pink edges, you can see just how much I warped your image in Photoshop to correct the wave.