Here's an easy way to visualize it. You have a 10 gal block of ice floating in the sea. 9 gal of it are below the surface and 1 gal is above. When the block melts, it becomes more dense and the 10 gal of ice is now the size of 9 gal of sea water - which exactly fills the hole in the water made by the block of ice.
That was my mistake. The 10 gal block of ice (which is 9 gal of water when thawed) won't displace 9 gallons of sea water. It would displace as much sea water as weighs the same as 9 gal of fresh water.
Sea water is about 2% denser than fresh water. So your 10 gallon ice would displace 8.82 gallons of seawater. When it thaws, it would mix with the 9 gallons of seawater to make 18 gallons.
