Which makes even less sense - why would four times the population density use three times as much water per person?

It's weird that you're using both higher and lower population density ('more agriculture') as arguments for legitimately using more water. Also, I'm not sure if you know that Melbourne also has plenty of agriculture within it's city limits, lots of market gardens, and some farms out east. As for golf courses, Melbourne is somewhat known for it's "sand belt", an area full of golf courses because land is crap for anything else[1].

But no matter how much hand-waving you do, there's still only a couple of areas in California use as little water as Melbourne does, none use less, and plenty of it uses much, much more. Compton uses nearly 50% more water than the Melbourne average - where are it's agricultural industry and golf courses? Beverly Hills uses more than four times as much as Compton, and it has no agriculture or golf courses either (though it is next to one)

The point is that Melbourne is a perfectly workable city, and it gets by on a fraction of the per-capita residential use water that Californians do. Californian residents consume a phenomenal amount of water.

[1]http://en.wikipedia.org/wiki/Melbourne_Sandbelt