We are right there as well in my RotRL group. We also are having the "wait! Why do I need to open the floodgates? Doesn't the hole at the top act as a "floodgate"/spillway?" discussion.
I am pressing upon the PCs that hole is eroding the dam, and than the entire dam could fail because water was not meant to go through there. Unlike the release valves (water is meant to go through those). As part of fixing the situation they are also felling trees and blocking the hole in the top of the dam with a makeshift log jam.
The whole situation (that the plot hinges on) does not make a whole lot of sense....unless you