I recently attempted to mix up my own hot oriental mustard using a powder, bought in the local supermarket. (S & B Oriental Hot Mustard)  Following the directions on the can. I mixed with water only. I found that, I could not put enough water in the mix, to dilute the heat, without making it too watery.   Is there something else I can add, that will dilute the heat without making the mustard too watery, sweet, or otherwise significantly altering the flavor?  The ingredients in the can of mustard powder I used, are Mustard & Turmeric.  I am trying to imitate the flavor & spiciness of the dipping mustard that is served in Chinese restaurants. 
Replacing about 60 percent of the water with rice vinegar smooths it out a bit. It's still spicy heat, but not so harsh. When I started using the rice vinegar, mine started tasting a lot more like what we are served in Chinese restaurants.  