I've seen it on a few occasions. One was a guy with a mental condition called,"psychogenic polydipsia." (translated: crazy dude who drinks water nonstop), and a marine grunt who was told by his gunny to always drink plenty of water, so he carried a gallon jug around.
The issue with too much free water, in an otherwise healthy person, is the dilution of electolytes.
Sodium, potassium, calcium, magnesium, etc, are needed in the body at a certain concentration to perform many physiologic tasks. From cardiac conduction to brain activity, too much or too little of essential elements can cause cardiac disrythmias, seizures, etc, up to and including death. As for water: most people cannot even tolerate the volume of ingested water to cause these problems. For most people I'd still reccommend staying hydrated and drinking water quarts and pints at a time. Not GALLONS!