The winner, Jennifer Strange, allegedly left the contest crying, with a headache. She was found dead in her home the next morning. I will paraphrase the explanation offered by blogger Shelly Blatts:
Water intoxification can occur when the blood becomes too diluted and the body's electrolyte concentrations are unbalanced. If water enters the body faster than it can be removed (and in the case, they weren't allow to pee!) the body's fluids become diluted to dangerous levels. Because the amount of water in the fluid outside the cells is so great, water rushes into the cells through osmosis, causing the cells to swell and burst under the pressure. (Remember: osmosis keeps the cells balanced in normal body conditions.) If these cells burst in the brain, it can cause death.What a sad situation. May this be a lesson to the rest of us not to push out bodies to do unnatural things for "contests." My sympathies go out to her three kids.
For more information, read about water intoxication at HowStuffWorks.