You have discovered one of the traits of the short Backwoods Smokers and there are a couple of things you can do to improve your cooking with your cooker.
First and most important, do not run the cooker over 225 degrees measured with the standard door thermometer "using water" as any temperature over this will produce a more vigorous boil in the pan and will produce way too much moisture inside the cooker. I'll bet you were having most of your rub wash off of your meat as well during the cook if you were using a higher cooking temperature.
You can also loosely wrap your non built in water pan with foil leaving a much smaller opening to prevent less moisture in the cooker.
You could use less water at the start of the cook and when filling, again use less water in the pan especially at the start of the cook.
You can run the cooker without water using my tin foil method as many of the top cooks in the country have done so with great results. This is nice as many cooks are now using a higher (275-300) cooking temperature for most of their bbq cooking or smoking. http://olddavespo-farm.blogspot.com/200 ... ooker.html
Anyway, I would try the 225 degree door temp first to see if that will help and then try the other methods.