Where exactly are you reading the version number from? After installing the 1.32 patch, on the main menu at the bottom right hand corner of the screen it should say "Divine Divinity - V1.0032A". The patch version number and the game version number are not equivalent.
How did you re-install the game? Doing it on two different computers reduces chances of a corrupt file (unless the CD itself is damaged). Did you un-install, re-boot, shut down all non essential programs (especially anti-virus), re-install the game, perhaps start the game and check the version number, re-boot, shut down all non essential programs, install the patch, re-boot, shut down all non essential programs, start the game. This procedure is a bit over-cautious, but the best way to avoid install problems.
I've seen the problem with the screen not updating a couple times in the old forum. IIRC re-installing fixed it, though. Try deleting all of the files in the '..\Divine Divinity\Run\Dynamic' folder, then start a new game, run to the well and see if it works.
This folder is used as a cache for the game. Files are created / copied there from the save game folder when you load, and written / copied from that folder when you save a game. The files will be re-created as required the next time you start the game. If there was a corrupt file in that folder, deleting the files should fix the problem.