The canal doesn't make sense because of the locks there. I don't think he ended up in the canal personally, the Dodder and out to sea possibly.
It does tie into his behaviour though as you mention.
It would make sense as well as the people who trailed Deely and the man in black up Haddington Road a minute later didn't notice anything unusual (the woman never came forward, she was scantily clad apparently so possibly a lady of the night herself...possibly with the MIB). Deely had to have veered off HR unless they themselves took a left onto Percy Place or went down a laneway. Once you get to the junction of Northumberland Road it would seem less likely something would happen as you're back on a main road.
I suppose the 100k reward would bristle the ears of any streetworker who might not have come forward with info then due to their line of work - but 16 years later it's hard to imagine that those types would be a) still alive or b) if alive, possibly out of that life completely and not going back.