Assuming that the water you're using is decent, it's unlikely to cause damage to your system. However, it is more likely that if you're using the wrong spec coolant that damage can occur. Your M104 was designed to use a non-silicate coolant, G-05 spec, 50-50 dilution. Other coolants may contain abrasive silicate or may be incompatible with the seals and gaskets used in the engine.