Not a bad theory, I'm not a fan of having Link die though, he's just too... I dunno, nooooooooo!
Here's another thought:
Hyrule IS flooded, yet as opposed to this being the end of the game, it's an event that is simply part of the progressing storyline.
Link manages to get to high ground and now has to defend the last remaining strongholds from falling, these in turn end up being the islands of Wind Waker, as Link survives for his lineage to continue...
I dunno, just bored and thinkin of possibilities.