Not sure whether you have already solved this but I just read through this 
thread and thought I'd reply:
First of all, yes, $basetexture2transform does not exist. Seems like you got 
$basetexturetransform2 and $texture2transform mixed up.
Second of all I think LightmappedGeneric will not work the way you want it 
to. I have never tried this before but try using LightmappedTwoTexture as 
the shader, $texture2 as your second vtf and $texture2transform as your 
matrix.

- Ben


Christopher Harris wrote:
>I don't think a basetexture2transform exists maybe It is saying the Proxy
> was unable to initialize meaning it probably could not find that variable 
> in
> the shader. Valve has done a foam/wave texture in the past using an 
> overlay
> on their oceans that is animated. So it may work that you can just have 
> the
> overlay scrolling and then in the map apply the overlay over the water
> texture.
>
> Chris 


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