I would not want water inside my computer case so I would look for a non-conductive heat transfer fluid (many liquid cooling systems use them).
There almost no fluids with higher thermal conductivity and lower electrical conductivity than distilled water. The few that do exist are prohibitively expensive. If you can't get around the need for using water that likely makes the problem uneconomical.
Distilled water is only so good at being nonconductive and it easily picks up ions from just about anything including the impeller on the pump that would be pumping it. Water is one of the most corrosive liquids around in deionized forms (eats away at brass, or anything with iron and water is also what brings down mountains over time). This could pose a problem for heat exchangers. I also assume that you mean deionized and not distilled because distilled could still be somewhat conductive.
Sure the nonconductive fluid would be expensive but it would only be necessary on the closed loop connected to the chips. The heat exchangers would probably be similarly expensive but if you were doing something like this it is what I would recommend. You are already spending thousands as is.
Meh. Been watercooling systems for 7 years now. Never had ions in water kill a rig. I have blown many components over the years for non-water reasons. Heat exchangers are pretty simply and cheap.
High thermal conductive and low electrically conductive fluids are incredibly expensive and have to be changed regularly as they will become ionized over time also. Flourinet is about $300 per gallon for example. Use high quality tubing, distilled water, and good connectors. The risk honestly isn't that high.
Water is incredibly good for cooling which is why it is used in everything from super computers, to racecars, to nuclear reactors.
