Can low hCG levels be caused by drinking too much water?

No. Hcg is produced by the placenta and is not effected by food or fluid intacke. Test for urine or blood are very sensitive.
In urine. Hcg levels in urine depend on the concentration of urine and drinking too much water will make the urine dilute and the HCG levels will appear to be low. Drinking too much water is not likely to affect the blood levels of hcg.