Well I gave it a try. Forgot that the World Position Offset, is exactly that, an offset. So my previous concern about the mesh being flattened is of no concern. Ran into another problem though with splashes stretching along edges, where part of the splash reads one height and the rest reads a different height, so the whole splash mesh get stretched vertically.
I found a work around by using Particle Position instead of Absolute World Position. This way only a single depth is read for the entire particle. But for this to work right, the render target resolution has to be much higher, basically 1:1 with the capture size. Obviously not the best for performance.
The only other way I could think to get around this would be to take multiple depth samples around the particle’s position and use the lowest value. Should allow a lower resolution render target, but would result in a more expensive material, so bit of a toss up there for performance.
Unless you have some other ideas on how to solve this?