To avoid any further confusion are we talking about the old Legacy Water (from TRS12 and earlier) or the Water Effect Layer (from TRS19, TRS22, Trainz Plus)?Good news! I've got the water back again. One slight problem: at present, I haven't rediscovered how to change the water level, but at least I can see water again in places.
For the legacy water the water is painted and raised/lowered using the terrain tools. There is a set of water control buttons.
For the Water Effect Layer you set the Surveyor 2.0 brush tool to the Effect name in the Brush Target drop down box, then use the Height Up/Height Down/Set Height/Grade actions from the 2nd drop down box with the settings in the Tool Options Palette. See How_to_Use_S20_Tools#Water_Effect_Layer