Actually, it comes from gardez le loup. In certain obscure dialects of French, "loup" (wolf) was slang for a turd. So when you threw your wastewater out the window, you told those below they were welcome to keep the turd.

Seriously, "regardez L'eau" means "look at the water," not "look out for the water." If you were to "regard l'eau," you'd get it in the face.

"Gare de l'eau," "gare a l'eau" and "gare de l'eau" remain the most likely etymologies, and indeed "gare l'eau" was used this way in France, as the dictionary maeve links to makes clear. We can keep throwing out other theories (as it were), but it won't change this...