Becky...I know a lot of people (mostly critics) say this is a high protein diet (something that Dr. Atkins never agreed with), but you have to remember that those protein recommendations are based on the former high carb recommended way of eating, which for the most part were protein deficient.
Yes, I do think that a gallon of water a day is a lot. I get 2 liters, sometimes a bit more, and my urine is only concentrated first thing in the morning when I get up and have had nothing to drink for 7 hours or more. For me, "drink water until you float" means about 2 liters. For some it could mean more, for others less. Telling someone to "drink water until you float" isn't very precise which is where the 2 liters a day recommendation comes in. Consider also, that when people talk about increasing water consumption due to higher protein intake, that the vast majority of people don't even get those eight glasses of water per day (maybe half that at most!), so 2 liters would be an increase for them! Quite honestly, before I started low carbing, I could go days without drinking any water and drank only coffee and diet pop instead.
Think about it...are you losing 10 pounds or more a week at this point? Five? I know I'm not, so where is this "severe fluid loss" that the article you posted speaks of? Water is heavy, so if you are losing a lot of it, you would drop weight rapidly as well as showing obvious signs of dehydration. A liter of water weighs over 2 pounds; most people lose about that much weight in a week. All water? Not according to my fat percentage analysis! The majority of what I have lost so far has been fat and very little muscle, thanks to an adequate protein intake. Initially, there is a quick water loss as the body's glycogen stores are depleted during the first 3-5 days of induction, but most people here will tell you that weight loss after induction usually slows quite a bit unless you started out with a large amount of weight to lose. At 2 liters of water per day, I can tell you for a fact that I am not dehydrated and my pale yellow urine also tells me that. If a "high" protein intake really causes such severe dehydration unless you drink gallons of water, according to that quote you posted, I should be nothing more than a dessicated pile of cells by now after 2 1/2 years of low carb and "high" protein and "only" drinking 2 liters of water a day. Really, what that quote you posted is talking about is the first 3-5 days of induction, not what happens after that.
I'm also wondering why the focus on protein metabolism since that is not where the majority of our energy source is coming from. It's coming from fat! Both that from your body's fat stores and from what you eat. The body prefers to use protein to build and repair, not as an energy source unless no other energy source is available. Ketones are the result of mostly fat metabolism, not protein. Water is needed for fat metabolism, but again, I doubt that most people require a gallon a day. Now if you're really thirsty enough to drink that much water, go for it, but I'm not going to tell someone to force themselves to drink that much water if they are getting the minimum amount required (2 liters), especially without any really solid medical evidence that it's necessary to back me up.