If you go back to normal 3 days out and you stay on same food you should go down. I try to be spot on a week out, than up the food when i start cutting back water to normal, cause i know weight will drop some. So don't know what went wrong or what it is that you wanted to achieve? By giving that much water in training, there is no water retention(not the other way around) and most excessive water will just be pissed out within 24 houres. Maybe you expected the dog to lose more.

How much water did you give when u started cutting back, and how much overweight were u when u started cutting it back?

The term drying out sounds kind of creepy. If you draw out water from your dog's muscles so do you draw out crucial electrolytes.