IF you have a cleric that is a hardcore drinking Dwarf that is also a Cleric of the Faerunian Dwarven gods, it seems reasonable, to me, that "Holy Water" would be an Ale, like the Abbey Ales made in Europe. What are your thoughts on this?  Somewhere in one of the books it mentions that as long as the mechanics remain unchanged, they can be "flavored" however you like...

I'd say it'd be up to the DM. Holy oil also exists, so holy ale or holy wine might be allowable, but DMs might be concerned with the slippery slope of abstraction: if this also counts as water, then how much stuff will a player try and ask to control or destroy with Control Water or Destroy Water? But if they say 'yes, you can also create holy ale, but it's not water, but it will function like water for X specific usage,' then they don't have to worry about Beer Tsunami.

Seems like it would be OK, as it's purely for flavor reasons (no pun intended). I think it would depend on the god, specifically, but I could see a variety of liquids acting as "holy water." In the end, it will be up to your DM. 

In R.A. Salvatore novels the Dwarves used mead as holy water.

There's no mention of molecular composition anywhere within the rules or lore, so no, it doesn't have to be H2O. If the water in a given setting is different than water as we know it and is not composed of a hydrogen atom and two oxygen atoms (though I doubt any setting has such a granular level of worldbuilding), then that's fine, because it just has to be water.

As far as using other liquids besides water, that's up to the DM, but the rules specify water. I would personally probably allow things like oil or wine or mead in specific cases for story reasons or as part of a specific bit of worldbuilding, but in general it's only water.

Wait a minute.............. are you suggesting I can create Holy water if I use cow's milk instead of water ????