Wasn't camel dung part of another quest? I seem to remember something from a quest in Pollnivneach or somewhere else in the desert involving hot sauce and camel dung or something to that nature....
I got frustrated with my continually emptying waterskins, too. I've found that you can run a short distance NE to Nardah, buy a bowl from the general store, and refill everything from the fountain there (if you've completed the quest.) Hope this helps!
Go to Brimhaven village on Karamja. Go into the house across from the pirate bar (not the restaurant!). Go up the ladder to the second floor (if I recall correctly...hehe.) and open and search the chest of drawers you find in the room. Good luck!