Cooling Server Rack with Water? Sensible? Reuse energy for small installation?
Solution 1:
As to the cost efficiency of water cooling in general, there's another good question that I answered already: Why datacenter water cooling is not widespread?
As to your specific situation, I would highly recommend looking at ground-loop heat pumps with economizers. It's likely cool enough in your Winter to just run the economizers, using what is basically outside air to cool your data center. In the summer heat pumps are much more efficient than standard AC units, roughly twice as efficient typically.
Using common loop heat pumps can allow you to extract the heat from one area (data center) and pump it into a different area (office space or an attached home even) quite efficiently too (though it's probably more cost effective to go with conventional sources, it depends on energy costs in your locality).
You can use air to dump-water to cool as well, air within the rack (as is typical) and fresh water to cool the air. This water can come from fresh sources and be dumped after "heating"; this used to be common to run commercial size refrigerators because the math worked out just as you put it in the Question. It's not commonly used today because water is more expensive than it used to be and the math no longer works (at least in my corner of the world, and water is pretty cheap here too). It would be more efficient to directly cool the server with water-cooling, however you introduce the risk of leak as well (which carries it's own risk or insurance costs).
The biggest detractor you'll have in implementing any of the aforementioned is that it's expensive equipment. Most businesses don't care if it pays for itself in 10 to 20 years, they only care about this year's bottom line. The payoff period depends on your local prices..
Solution 2:
TomTom - I very nearly bought a bunch of HP's MCS water-cooled racks for a project a few years ago but chose to change data center instead.
It's not exactly cheap but they stand by it in terms of reliability, for instance they're happy for you to put their Integrity stuff them. It can handle ~36Kw per rack by the way.
Just wanted you to be aware of this stuff as it doesn't exactly leap out of their website.
Solution 3:
There are two approaches to this, one I know for sure exists in the market, and another I've only heard about in custom builds.
Market-ready
These solutions use a water loop to provide at-rack cooling. They produce chilled air on the intake side of the rack, and use the water loop to exchange heat between ambient and what it produces. These solutions exist, and don't require any modifications to racked hardware to make work. They sometimes require special rack-doors to ensure correct airflow, but not always; some solutions create a 'curtain' of cold air in front of the server intakes.
With this approach you can easily break the 10KW/Rack barrier for power density.
Custom Builds
This approach brings water into the device themselves. I don't know of any off-the-online-store servers that have water loops built into them, but I hear that the major manufacturers can help you if you really do need 10K devices with such requirements. The advantage here is that you can push higher on the power envelope as you're not relying (as much) on air transmittance of heat, as the water-block itself does the heat transfer from the devices.
Theoretically you can get really high power densities with the custom-build method.