I don't think I'm understanding you correctly. Are you saying that I can add an empty sound file to the MPQ file directory I listed? If so, I'm afraid I'm not sure how. I'm currently using Ladik's software, and it seems to only operate as read-only.
Wow definately will read .wav files in terms of replacement, I currently use it both on live and on the beta client to supress the 'fizzle' sound from spellcasts and the gyrochopper idle noise, among other things. It isn't just failing silently either, as replacement of gun->bow sound works also.
And yes it's weird that PlaySound lost .wav access, but it does definately still work.
Basically, what you do is go to your wow folder, inside that should be a data folder.
In the Data folder you need to create a folder named Sound, and inside that one named Creature, and inside that one named WaterElemental, and in there you need to put a 0 length wav file named WaterElementalloop.wav
Basically you need to recreate the path based on the mpq, but DO NOT screw with the mpq at all, Blizzard allows file replacement of sound/etc files via this way, but screwing at all with the MPQ file WILL get you banned, as it allows you to screw with models and things that they do not wish altered.
Attached is a correctly made 0 length wav file that I use to mute things, feel free to rename it and put it where you need it.
You can even just rename a blank .txt file to .wav. I just use a batch file to create all the directory structures and create empty .wav files like this:
echo off > "Sound\Ambience\GlueScreen\Wrath_Login_1.wav"
echo off > "Sound\Ambience\GlueScreen\Wrath_Login_2.wav"
echo off > "Sound\Ambience\GlueScreen\Wrath_Login_3.wav"
echo off > "Sound\Ambience\GlueScreen\Wrath_Login_4.wav"
echo off > "Sound\Spells\Fizzle\FizzleFireA.wav"
echo off > "Sound\Spells\Fizzle\FizzleFrostA.wav"
echo off > "Sound\Spells\Fizzle\FizzleHolyA.wav"
echo off > "Sound\Spells\Fizzle\FizzleNatureA.wav"
echo off > "Sound\Spells\Fizzle\FizzleShadowA.wav"