Not the subject, but with the gender, number, and case of the thing which is owned. (The owner is du, i.e. "you" when speaking to one person whom you know well or to one child.)
Here, Wasser is neuter, singular, accusative so the form is dein (no ending).
There's an inflection table here: http://www.canoo.net/inflection/dein:Pron:Poss:2nd:SG (see the table "attributiv (vor einem Nomen)" for this case since it's in front of a noun, Wasser).
"i drink your water", should be acceptable
It is. That's one of the accepted answers.
it is a perfectly good sentence in English.
That's a necessary but not sufficient condition, so it's mostly irrelevant here. Sentences not only have to be "perfectly good English" but also have to mean the same thing as the original. (Yours does, but sometimes people propose translations that are perfectly good English but have a different meaning.)