I have found a nitrate free, sugar free bacon and it does cost about the same as packaged bacon (the stuff I buy is in the butcher counter). But sometimes a packaged bacon will be on sale so cheap I can't resist it. It might be my imagination but I am pretty sure I retain a lot of water with the packaged stuff (but not with the butcher bacon).

I do believe the salt makes a difference and, for me, drinking a lot of water does not make a dent in water retention.