I did this mission on Hardcore with 4-star SMG and Assault Rifle. This mission has 3 distinct sections (major spoiler alert):
First, jump into the nearby chopper and fly to the waypoint. When the sub emerges, hang back and fire at the front of it. You should be out of range of the SAM sites and three enemy choppers will spawn. Lure them close to take them out one by one. Then, move in closer and circle-strafe the sub to destroy the SAMs. Keep moving and you should be able to do this part without a scratch. Once you've landed on the sub, some soldiers will instantly spawn, so take them out quickly with your SMG. Use the door lock and you should be inside.
For the fight with Panay, keep well back and hide behind the gold piles. Don't get too close to them or his rocket splash damage will still get you. Use your assault rifle on the ninjas first and then aim for Panay's head when he's not firing (it may be my imagination, but I'm sure that killing ninjas also knocked a bit off Panay's health too). There are two fresh rifles and a health pack down here, so take your time.
Finally, you'll do the rodio with the nuclear missiles. Simpy shoot Panay to knock him over, then diffuse the missile and press B to jump to the next one. Repeat this until you're on the final missile and the end cutscene will show.