So I made a patch to fix the glitches with 32x32 textures. It puts the water, lava, fire, and compass animations where they belong and makes them the right size. (Actually the compass needle is still/will become too small, but it works.) Note the animations don't use textures and will just replace graphics from the pack with the normal look.
To install, first install a 32x32 (512x512) pack like brown and bloom. Then put mcpatcher.jar in your .minecraft/bin folder and run it. It should move the original minecraft.jar to minecraft.original.jar and patch minecraft.jar.