Good ideas. I was thinking that it would have either an internal or external wheel. The internal wheel would use falling water piped into the multiblock --- So the input hatch would be required to be on top --- or an external waterwheel, which would have some kind of cool in-world wheel like RP2's wind turbine and whindmill. Speaking of which, those would be pretty cool as multiblocks too. Anyway, returning to the waterwheel, It would generate EU based on how many FLOWING water blocks there are within a certain area, and would spin slowly at first, but then start sinning really fast (hence generating a lot of EU).
The reason I said source instead of flowing is because it is extremely easy to get a ton of flowing blocks, but to get a lot of source blocks it is much harder (maybe it could generate energy off of flowing blocks, but source would make more) by making it require source blocks it would make the generator much harder to spam, that said, a generator where you pipe the water in from the top would be interesting to see, but it shouldn't generate too much energy, and it should use a lot of water.