What are your system specs? Water (heat) gun requires advanced PhysX option enabled, since the 1.1 patch that was integrated into Steam version due to popular demand was meant for high-end nVidia cards when it was released. Make sure that advanced PhysX is selected in the game options.
On the other hand, try to unzip this archive into your Cryostasis folder (it's located somewhere inside Steam\Steamapps folder), overwriting existing files, it may help.
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