Bug,
Dusting off my physics, I believe "hydrostatic" is correct. A hydrostatic shockwave is not created by moving water, but rather by the elasticity of water.
I hate to get into all the stuff about permanent and temporary stretch/crush cavities and all that, and I'm sure you're right that hydrodynamic shock occurs at and near the bullet impact. Hydrostatic shock is often credited for doing damage at a considerable distance from the impact.
