My theory is very technical, and can be viewed in detail at http://www.geocities.com/triplehelix2000/
, but it is based on a very simple concept. Mirages are light being bent by the hotter air near the ground. What you precieve as water is the sky, being refracted by a refraction rate gradient. My theory is basicaly predicting how light travels in a region of space that has a certain refraction rate gradient. Once I solved that problem I went backwards and used a path that completely deviated around a certain volume to find the corresponding defraction rate gradient. Now I have the exact refraction rate with respect to radius from the center of a sphere that will make light deviate around the center and proceed outside as if it wasnt incident on anything in the first place. The only final question is how to construct this gradient. One way is to use a transparent medium and vary its density. The other is to induce heat at a certain radius from a point source, since the refraction rate of air is proportional to its temperature. This will envelope an object in a "cloak" that will bend all light around it and have the light proceed along its original trajectory.

Man, you lost me after that part of 'percieving water as the sky'

Sounds like you've got your theory down, but constructing something like that is another story. Maybe you have the facilities to do. Don't let anyone discourage you, good luck with that.