Life on Earth is possible without water, but only in a suspended state (
tartigrade example), if you call that living.
If you don't call that living, then you are admitting the creation (or recreation) of life when the water is added back.
Ongoing (non-suspended) life in Earth does not happen without water. The chemistry just stops (mostly, see below).
The (unstated) reason so many people mention water is a universal solvent is that life processes involve lots and lots of specific chemical reactions. Molecules dissolved in solution allow this chemistry to occur more rapidly and let components not originally found next to each other (where they could react) to get near each other. This would not happen (or not as well) if the chemistry were based on solids rather than solutions. Reactions between two solids would only occur at their touching surfaces (unless large amounts of energy were released which could pulverize, liquify, or vaporize the chemicals).
TeethWhitener said:
Edit: It also suggests that a mule is not alive.
Presumably you mean that this is due to its not being able to reproduce.
However, a mules cells do reproduce themselves, within the animal.
WRT viruses and being alive:
Viruses, or any life form we are aware of, need the proper environment in order to survive and reproduce. Without the proper environment, no life form will survive.
Important parts of many cells environments include the proper environmental parameters, nutrients, and a variety of other things.
Important parts of a virus's environment include living cells to parasitize (actually, the cells own controlled internal environment).
Important parts of a parasite's environment also include their hosts.
While I could argue (based on choice of definition) that viruses are either alive or dead, I don't know if I would feel right about ruling them out based on lacking an anatomical feature in a discussion about the hypothetical existence of life forms differing from the only kind of life we are aware of.
The problem of this whole discussion (which I am kinda enjoying) is the lack of a good general definition of life that a lot of people like and that could be applied to life forms foreign to our current awareness (basically already stated).
On the other hand, I think the possession of a cell membrane was important to the original evolution of life (as we know it, on earth) since it allowed a genetic information system to control its essential internal environment (essential for how the genetic system maintains itself) separately from that of other competing genetic systems.
Other potential forms of life differing from what is on earth, might take any number of possible forms and all that is speculation (as several have already said).
A sci-fi favorite alternative life form of mine is based something like interacting electromagnetic entities in the plasma of stars rather than chemistry.