Water in iClone can be animated it's just that the keyframes won't show up in the timeline as far as I can tell (there is no apparent track for the keyframes) .
I have found that if I, turn off the GIZMO, select the water prop in my Scene menu, then slide the playhead to the desired spot on the timeline, then use the scroll wheel on your mouse to lower or raise the water it will animate as you play from the beginning of the timeline....at leadt it does for me. Now if you need to change the movement you will need to start over again and load in a new water prop and try once more.
Now if you need to start the movement much later in the animation you should be able to go to that point in the timeline and maybe make a very slight movement, that would create a keyframe that's not really apparent, then move to another point in the timeline and make your big adjustment to create another keyframe....just a thought.
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