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So i ran into this problem before and i am not sure how it got fixed but i am stuck at it again . i have the color map ready along with displacement map and now i am trying to paint the water with reflection at first i get a very high water so i am setting all media to -3 and everything looks great .
the problem i am having is in testing the units walk on top of water even in deep spots i am not sure what the problem is i try to add media terrain paint before and after the reflection paint but with same result .

displacement map



after adding reflection water level=0



after i set media hight to -3.00

the displacement map is higher then the reflection map.

Once you force-set the 'media height' to something lower than the displacement height, it wont automatically fix the displacement height... resulting in that kind of wacky (but if used correctly/creatively, useful) 'air walking' effect. Once you've adjusted media height to -3, you need to go over it with the displacement brush tool... using ANY function on the faulty height will fix it (lower it to the water's new level), but I recommend using the Smooth tool with a setting of Filter Rate 2.0. Then to make deep spots, you actually need to take your displacement raise/lower brush and lower the height of the media terrain to be deep in the deep spots. Because the media level is always at -3, if you have mesh set to -5 underneath the surface, it'll create a spot in the water that is 2 WU deep. Roughly blocking in depths using absolute elevation, then using the Smooth tool with a Filter Rate of 3.0 or 4.0 to buff out the transitions is usually a pretty solid method of going about it.

Thanks Gray for the explanation by the way i used your Grass tutorial on that it worked great i was done with the grass in 15 min , on the topic i was going to adjust the displacement map height but i wanted to take full advantage of the cam zoom out but i am not sure if i am right on that point , so dose having a higher displacement map effect the zoom out or am i wrong ?

You're absolutely correct about zoom height, currently at least. The devs are looking into a mapmaking feature for 1.8 where one may be able to 'set' the 'max zoom height' to something greater than the current internal bounding.

But at present, you've nailed the workaround- lower the entire mesh by several world units and everything will be further away at max zoom out.

As for the grass tutorial, I don't think I've ever made one; you sure you're not referring to Deadman's grass tutorial? He likes to think of it as uber. I typically use pre-fabricated textures and then mix them up to create my own versions, where DM makes his stuff from scratch.