Comment by herdrick

> Why does “as if the waters had but newly retired” mean there’s a lot of water (and thus mud)?

It doesn't. It means there's a lot of mud. It might help if you had the rest of the paragraph in front of you. It sets the scene for us with a bunch of sentence fragments -- bullet points, we would say. Here's the beginning of each of them:

    Michaelmas term lately over...
    Implacable November weather. 
    As much mud in the streets as if the waters had but newly retired... 
    Smoke lowering down from chimney-pots, making a soft black drizzle...
    Dogs, undistinguishable in mire. 
    Horses, scarcely better

... and so on.

And yes, modern audiences aren't attuned to biblical references.