I was wondering if there is a hardcode isue with the amount of overlays (water,mud,lava) that the game can handle? if so are they all filled up? how many are left? would it be worth my time to make new ones. what would you like to see

Well, each existing game file has 5 pre-set overlays, but DLTCEP can actually handle more or less.
I'm not sure if the engine would be able to cope with it.
But you can try to delete or add overlays using dltcep.
If it doesn't add the overlays correctly, just shout at me