  We present an analysis of an unusual pattern of water vapor emission from the
$\sim$2 Myr-old low-mass binary system VV CrA, as observed in infrared spectra
obtained with VLT-CRIRES, VLT-VISIR, and Spitzer-IRS. Each component of the
binary shows emission from water vapor in both the L ($\sim3\,\mu$m) and N
($\sim 12\,\mu$m) bands. The N-band and Spitzer spectra are similar to those
previously observed from young stars with disks, and are consistent with
emission from an extended protoplanetary disk. Conversely, the CRIRES L-band
data of VV CrA A show an unusual spectrum, which requires the presence of a
water reservoir with high temperature ($T\gtrsim1500$ K), column density
($N_\mathrm{H2O}\sim 3\times10^{20}\ \mathrm{cm}^{-2}$), and turbulent
broadening ($v\sim 10$ km s$^{-1}$), but very small emitting area
($A\lesssim0.005$ AU$^2$). Similarity with previously observed water emission
from V1331 Cyg (Doppmann et al. 2011) and SVS 13 (Carr et al. 2004) suggests
that the presence of such a reservoir may be linked to evolutionary state,
perhaps related to the presence of high accretion rates or winds. While the
inner disk may harbor such a reservoir, simple Keplerian models do not match
well with emitting line shapes, and alternative velocity fields must be
considered. We also present a new idea, that the unusual emission could arise
in a circumplanetary disk, embedded within the larger VV CrA A protoplanetary
disk. Additional data are likely required to determine the true physical origin
of this unusual spectral pattern.
