The free HydroCAD download is great to try the product, but it is limited to five nodes; that's a total of five ponds, subareas, reaches and links. I do highly recommend the free download, but you will very soon need the full version to complete any substantial projects.
It is NOT a very common problem for files not to be backwards compatible with earlier versions of most software...MSWindows Office doesn't have this limitation and neither does HydroCAD or Terramodel, which is a competitor to AutoCAD. To my knowledge only AutoDesk (maker of AutoCAD) and Haestad products have this feature. While it may be sound marketing strategy (guaranteeing future upgrades), it shows disloyalty to existing customers...if I spend thousands on a product, I should reasonably expect to be able to interact with future and past versions of the same software.