You could make buttons with an LDR (covering them -> less light -> means press) and analogRead(). ..
Is there ambient light?
How many buttons you need? do you have analog lines free?
that is a good back up plan. it will be in a shower and the arduino will only be required to control 4 solenoids through relays and 4 button presses. so i'll have plenty of digital and analog pins available
Fresh water is not that good a conductor, however it has a high dielectric constant (probably higher than fingers).
This makes me think that for capacitive sensing you want to detect the presence of an object that has a low resistance is the aim.
So the capacitive contacts should be quite widely spaced and you are looking to detect a signal coupling from one contact to the object, travelling along the object's internal resistance and then modulating the other contact. So the capacitive coupling at each contact is not the dominant effect, its the resistance between them... My idea is that water couples well at both ends but has a higher resistance than fingers and so registers a lot less.
That's if my intuition is right, of course. Fingers contain blood capilliaries which have a reasonably high salt content (which should be a much better conductor than fresh water).
Salt water I would have said "give up"! (Well google around first!)
i think i follow you on this in theory but I'm still unclear on how to actually execute this. I'm very new to this type of electronics and microcontrollers and haven't come across signal coupling yet
I guess with using 4 buttons i'll have separate and distinct electrodes.. I have some flexibility with the layout and size. i'd like to keep it around 2.5" high and <4 wide (total size including enclosure which will probably be 1/8" abs). i would like a 2x2 button layout but could work it as a 1x4.