This really shows just how far removed mormonism is from Christianity. The fact that they use WATER instead of wine or grape juice really put down the shed blood of Jesus on the cross. Not that this practice is a shock to me - I've been aware of it for a while, but perhaps lurkers out there haven't heard.
It was taken from the earth during the Great Apostasy, but it was restored in 1829, when the Apostles Peter, James, and John conferred it upon Joseph Smith and Oliver Cowdery.
A closer study of mormon history shows that there was no documentation of this priesthood until nearly 5 years after the mormon church was started - around the time of a credibility crisis in 1834 did the men begin to speak of a special, miraculous conferral of authority upon them by apostles of old, which they claimed had happened prior to the organization of the church.
In his accout of the event, Cowdrey stated that the ANGEL (singular) conferred it, not the three apostles. Now which one is telling the truth of the matter. Neither is the event found in any of their journals/diaries covering the period.
As pro-LDS historian Richard Bushman admits in his landmark biography on Joseph Smith (Rough Stone Rolling, 75): “the late appearance of these accounts raises the possibility of later fabrication”--even though he doesn't draw that conclusion himself. Many thinking Mormons do raise that possibility, however. In a nutshell, they believe that there are good reasons to doubt the restoration of the priesthood actually happened in the church, despite Joseph Smith's later descriptions of the events in his 1838 History of the Church. The actuality of those angelic events and the exclusivity of power/authority which such events would denote, are highly questionable.
A good source for the origions of lds priesthood go to (cut and paste)
http://www.mormonthink.com/priesthood.htm
The use of traditional prison fare, bread and water, seems appropriate for such a legalistic belief structure.