Sophisticated water?

[Zamboro]

This came up in a discussion of a game concept many on /v/ want to see created; Could the HPL1 engine accommodate the addition of sophisticated physics based water as seen in Hydrophobia?

Example: http://www.youtube.com/watch?v=iZceJsTwdcg

As you can see the water doesn't merely raise or lower but the topography of it changes in response to breaking windows, addition of more water, openings causing it to drain away and so on.

Black Plague had moving water levels, but even Amnesia's water was no more complex than that. Can either HPL1 or the Amnesia upgrade of that engine handle water as seen in Hydrophobia or is it beyond it's constraints in principle?