Possible, but I didn't think she could turn anything into water except herself. That means that not only did she get out of the trailer and turn all that dirt to fairly liquid mud, but that liquid mud would then have poured through the hole and filled the trailer. So we then had a trailer full of liquid topped by a 40-50 foot deep puddle of mud. That's a lot of water, and so far Tracy in water form has had the same volume as Tracy in solid form. You would need a carnival full of Tracies to make that much water.

Which is not to say that the show wasn't having a bad physics moment and really did intend for Tracy to do exactly what you said.