We're talking maybe an Effects show with special effects and music perhaps with lasers over the water, and fire cannons similar to the ones seen at The Mirage Volcano Eruption in Las Vegas. Water jets could also be a plus, if all synced to the right theme. Depending on the show, the monorail isn't TOO obtrusive if they are planning to use it later even though it's trains are at Hersheypark now; recently reported by The Coaster Guy.
Yes, the lake would have to be worked with and tweeked a bit, but after all isn't it a part of The Movie District? And if our Effects idea were to go into play or with any show for that matter, it would certainly have to be timed right to not disturb the Stunt Show next door. Again, if you want a good example of our idea, check out the Mirage Volcano, also an effects show on a lake.