I found a webpage here:
http://freespace.virgin.net/hugo.elias/graphics/x_water.htm
And that's where i ported it from.

Fixing the debug panel was one of the main issues..thanks!

About adding a random value..
I tried that myself before(but to the counter variable which is now gone).
It seems to be adding twice as much as it should? i don't understand as i'v looked through this code thouroghly.. I will work on this later today(got to go to school now).

I thought this was an interesting topic too. I was originally going to do navier-stokes fluid(3d fluid) but that was too complicated. maybe when this is finished.

Thanks for your interest and help!

EDIT: i would of used 'for' loops like you but i didn't know lite-c supported them..