Yeah you found the one thing that I couldn't fix in my floating waterfall. The particle effects are there for when the waterfall is actually at the cliff, they show up at the right heights. Otherwise they get the watergate effect... which I can accept better than the floating waterfalls.
The only fixes I found for this problem (without changing the code) are:
1. remove the particle effects all together.
2. Move the partcle effects so this won't happen, but you won't see them when the waterfalls are at the correct location.