Sent a email to Zaino about dealing with the hard water. Sal Zaino sent me the following response.
////
You can not let water evaporate on the surface, no matter what kind of
wax or polish you are using. Never wash a car, especially dark colors in
direct sunlight. Try to wash your car in the morning or late afternoon or
evening... Never wash or use cold water on a hot paint surface.
You must dry the car very well after washing. Another great tip is to
use a Toro 210mph Electric leaf blower. Dries your car in about 5 minutes.... without even touching the paint surface.... If you car gets caught in the rain and the rain drop evaporate on the surface, immediate action must follow by washing the car and use the Z-6 to remove fresh water spots, that is one of the uses of Z-6. Most 'fresh' mineral deposits (water spotting, acid rain, etc.) can be removed with Z-7 Show Car Wash or Z-6 Gloss Enhancer spray. If they have been on the car for a while and Z-6 or Z-7 will not remove them.
Use household white vinegar full strength. This is acetic acid and will
loosen and remove the mineral deposits and not harm the paint surface. Most of the time, the water spot etching you see is simply the hardened mineral deposit, giving the illusion of etching into the paint. Believe me, when these
mineral deposits harden. They become really tough and hard to remove. The trick is to not give them a chance to harden. If the above fails, then use the Z-18 ClayBar to remove them....
If those water spots on your car have been there for a while. They might
be already etched into the clear coat. If Z-18 ClayBar will not remove
them. Then what you are seeing is an etched spot in the paint surface.
Although, I am totally against using an abrasive product on todays clear coated finishes. It seems like, in your specific situation, you don't
have a choice. I would try 3M Foam Polishing Pad Glaze Swirl Mark Remover
part #39009 by hand, not by machine, using very light pressure. This should do the trick. Be careful when doing this and only do the water spot areas, as the 3M is abrasive and will remove paint material. Don't forget to reapply Z-5 or Z-2 as the 3M products will remove any polish. If you opt to go with the 3M Foam Polishing Pad Glaze... see following tips...
3M Foam Polishing Pad Glaze use By hand:
Simply apply a small amount (about the size of a quarter) to a cotton
diaper or piece of cotton towel and rub back and forth into about a 1' X
1' section using light to medium pressure until it starts to dry out.
Then take a second towel and lightly rub back and forth until the polish
residue disappears and the gloss comes up. If there are still some
swirls visible you can repeat this step until they are minimal. I prefer
using a less aggressive product a couple times instead of using a more
aggressive product once. After you are done you can
wash with Z-7 and apply Z-5.
Hope this helps. Need more advice call me.--
////
End of response.
It only gets better with more applications. 
)
