This may seem silly-- but have you discussed this with your pediatrician. I have found that a couple times when they gave us icky tasting medicine - there was a better tasting alternative they didn't think of.
My daughter takes herbal remedies-- and they also taste awful. We found after trying many many things that a small amount of liquid with a HUGE amount of grape kool-aid powder did the trick (@ 1 tsp powder/oz. of liquid).
May want to try it even if they think it's worse with water. They could be wrong.
Another alternative is a compounding pharmacy. They will re-formulate the medicine into a flavored liquid. There are several in the city