Hmm...when you say that there can be no rectangles of water larger than 2x2, does this mean no rectangles larger in either of the two dimensions, or no rectangles covering more than four squares of area? It is 3:17 AM right now, but it seems like your definition is a bit unclear (though it would seem to lean toward the first definition I gave simply because you wrote out the 2x2 rather than saying four).