Kangaroo is very good too; the same if not more protein per 100gm than chicken...but not 98% protein...unless you're calculating that off the protein/carb/fat split and not the weight of the meat itself.
40 grams of carbs is pretty low, but yes, you can go lower if you want to, for a few days. I don't recommend it in the long term, though, unless you're going ketogenic.
Water is important because it clears your body of toxins and, when you are dieting heavily and training long, you tend to produce more of these. It's amazing how much weight people lose simply by loading up with water and cutting out every other drink - no coffee, no tea, no soft drinks, no alcohol, no juice, just water. This and, muscles are about 75-80% water, so they will probably shrink a bit (and you will lose strength) if you starve your body of it. It will just make your muscles look smaller on the day IMO. Definition in the abs is mostly body fat.