We went through the exact same thing with Loki. When we were housetraining he would pee every 5 minutes and he would gulp an entire bowl of water. We were always told to give puppies as much water as they want but he would drink so much that he would get sick! The vet checked him out and he's fine. So now we just measure his water but he still gets a lot. Now that he's older and housetrained we find that he probably goes out 2-3 times as much as "normal" dogs (maybe every 30mins-1hr) but he is capable of holding it in his crate (obviously while sleeping) when he doesn't have water.
Oh, then we found out he had nighttime incontinence ON TOP of drinking too much, so he's on drugs for that now. I just made a deal with him that he can have as much water as he wants as long as he pees outside!