Dick,
    Your explanation doesn't take into the laguage changes in 200 years. Here is the supposed source of the expression.
Etymology: Philippe Auguste, who ruled France from 1180-1223, according to legend, received the contents of a chamber pot on his head while strolling through the streets of Paris. The upshot of this misfortunate incident was that all residents of Paris began to exclaim, "gare à l'eau!" (look out for the water!) before dumping their dirty washwater (and more sordid liquids) out of their windows onto the streets.