It's not perfect by any means, but it's believable - and I guess that's all that matters. Maybe it's because you see Yoda in a context vastly different from the swamp in Episodes 5/6, but the CG is good enough to warrant Lucas' choice to digital for that specific scene.
And no, there is no scene in which Yoda fights with a lifesaver...although I wouldn't mind seeing one for a laugh.
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