making beer always results in loss. when you graduate from kits and make your own recipes, you'll make them for 5.5 gallons, to account for the loss.
you can add water before fermentation starts, but don't do it after or it'll taste like watered down beer. if you do it beforehand, it 'mixes', and though it will thin the beer some, it doesn't quite have the same negative impact.
Primary: English Mild
On tap: Pale Ale, Lancelot's Wheat, English Brown Ale, Steam Beer, HoovNuts IPA
Bottled: MOAM, Braggot, Raspberry Melomel, Merlot, Apfelwein, Pyment, Sweet mead, Cabernet
Gal in 2009: 27, Gal in 2010: 34, Gal in 2011: 13, Gal in 2012: 10