In this puzzle, the water needs to be lowered seven feet, which requires six columns. Since there are eight places to put the columns, you won't need two of them. Thus there are twenty-eight possible combinations of steps.

Here is a picture of all of the possible positions of columns and their heights. The horizontal line segments represent the top of the column, while the number above each segment is how tall that column would be. Remember, to solve the puzzle, you need one column on each level, and the columns should step down, from left to right, one foot at a time.

Notice that we have six column segments total, and we need to place six separate columns (in order for the water to be lowered seven feet). Thus, we cannot afford to stack column segments in order to, say, get a 5-foot column (by joining a 2-foot and a 3-foot). We also don't have any 1-foot column segments. This eliminates a few possibilites.

Working with what is left, there are two water levels that can only be achieved with one column height (one is a 3-foot, the other a 4-foot). We also must use the 2-foot columns somewhere, and there are only two positions left, one for each column. This leaves a 4-foot column for the first drop in water, and a 3-foot column for the last drop.