Discharge of hazardous substances into the marine environment poses a substantial risk to both public health and the ecosystem. In such incidents, it is imperative to accurately estimate the release strength of the source and reconstruct the spatio-temporal dispersion of the substances based on the collected measurements. In this study, we propose an integrated estimation framework to tackle this challenge, which can be used in conjunction with a sensor network or a mobile sensor for environment monitoring. We employ the fundamental convection-diffusion partial differential equation (PDE) to represent the general dispersion of a physical quantity in a non-uniform flow field. The PDE model is spatially discretised into a linear state-space model using the dynamic transient finite-element method (FEM) so that the characterisation of time-varying dispersion can be cast into the problem of inferring the model states from sensor measurements. We also consider imperfect sensing phenomena, including miss-detection and signal quantisation, which are frequently encountered when using a sensor network. This complicated sensor process introduces nonlinearity into the Bayesian estimation process. A Rao-Blackwellised particle filter (RBPF) is designed to provide an effective solution by exploiting the linear structure of the state-space model, whereas the nonlinearity of the measurement model can be handled by Monte Carlo approximation with particles. The proposed framework is validated using a simulated oil spill incident in the Baltic sea with real ocean flow data. The results show the efficacy of the developed spatio-temporal dispersion model and estimation schemes in the presence of imperfect measurements. Moreover, the parameter selection process is discussed, along with some comparison studies to illustrate the advantages of the proposed algorithm over existing methods.