It can definitely be done with low risk of oxidation or contamination. I was listening to a Brewing Network podcast (Dr. Homebrew I think) and they just recently were talking about a technique where some people brew a "concentrated" beer (usually by mistake due to higher than expected OG, or possibly even FG; or possibly by limits of fermentation space), and can dilute the beer down post fermentation. Basically they described the procedure as the following:
-Brew a beer as normal, let it ferment out. When finished:
-boil the water to be added for a few minutes
-cool it (maintain sanitation practices obviously)
-bubble CO2 through it for 15-20 minutes (this will scrub the O2 from it, so you won't oxidize your beer when you mix it together). best way to do this would probably be to put the boiled and cooled water in a keg, then just stream some CO2 through it.
-once at proper temperature, mix your water and beer, then carbonate as usual.