Some animals have a naturally nervous disposition. This goes for just about any species and that is some individuals make good pets and others don't so if you can't get this one to turn around please don't feel too bad. This is the first time I've ever heard of a rodent that drinks water because it is nervous. It's not uncommon with pet birds though.
I used to have a chinchilla like that and it was one of those rare males that will spray urine (they can't really spray as it just dribbles out) when I cornered him. It took months of working with him before he was manageable. It took some weeks before I was able to pick him up to move him to the dust bath without the threat of getting bit. My strategy was to interact in the cage as much as possible many times a day. I would open the door, give him a piece of raisin, and I would sometimes touch him just by the tip of the nose because that was the only place he'd let me touch him without running off. After several days I would pet him further back on the head and chin and he'd accept that. Then I'd progress towards his back. Then after about three weeks of that I would try to get one hand under his front feet. Then do that for the back feet. After about a month I was able to hold him but only for a second or two and then I'd immediately return him to the cage. This was done about 10 times a day. Then I'd do it in longer increments until he would tolerate it for 20 seconds or more. By the time I had him put to sleep for tooth problems, about 8 months later, I could hold him for about two minutes and pet him. Anything more than that he would threaten to bite. During this time I also took him out of the cage (by letting him run into a container) and sat in a shower stall with him where he couldn't get away from me. I would let him roam around and crawl over me for about 20 minutes a day. Each week I would do more with him so I could pet his head and back and eventually hold him in the stages I described. Chinchillas are trainable but it takes time, experimentation, and great patience. They are some of the most trainable pets I've ever had. He never got very tame but he was manageable and could be handled. My second chinchilla is extremely tame. He will lay across my chest and let me pet him for an hour if I wanted to and come back for more when I try to put him away. He didn't start out that way but he was obtained from a breeder at about 3 months and handled many times a day. No chinchilla will ever be completely stress free. They are hard wired to constantly look for danger but they can be desensitized by frequent handling where you don't get them to the point of being startled, biting, or slipping fur. If those things happen learn from it and try again. Eventually you should succeed.