This would probably be ridiculously complex, and I don't know if it's something Torque is even capable of. Basically, water that isn't transparent, undulating bricks. More specifically, has a fog effect, getting more opaque the thicker a body of water is; more transparent when viewed straight-on, more reflective when viewed at an angle; and refraction. If you don't know what I'm getting at, look at the water in Half-Life 2. The game's already six years old, but it was one of the first games to have water that actually looks like water, and it looks great.
Well your reasoning is certainly sound