There is such a thing as water intoxication. A person needs to drink an extream amount, and in a short peoriod of time, not through out the entire day. People who drink that much for the purpose of becoming intoxicated will have extreamly distended bellies from all the water.

There is also problems if electrolytes are flushed out. This is why people working hard in the desert will take sodium pills.

It is doubtful that you would have problems with either of these at 4 liters spread out all day. For the electrolytes though, it is a good idea for anyone on Atkins to suppliment with potassium/calcium and magnesium. This will also help if you are having leg cramps.