This since Bühler's detailed analysis of the Nīlamata in his famous Kashmīr report of 1877 well-known desiccation myth simply provided a background for "Nirvacananists" in search for a meaning like "water-draining-away" in the syllables ka-śmī-ra. The Nīlamata reference with ka (n.) as "water" may tacitly presuppose on what Govind Kaul elaborated more extensively later in the 19th century. See his Rājataraṅgiṇīpradeśavyākhyā (MS Stein No. 128, Clauson's Catalogue [1912] p. 598). There, he explains the nirukti in the context of Kashmir's "second name", Satīsaras, in the following manner: kaṃ [=] jalaṃ, śmīrati [=] calaty asmād iti śmīra smīra calane iti dhātor auṇādikaṃ rūpam. Thereafter he quotes your Nīlamata passage, incidentally using the notable variant halinā instead of hariṇā (cp. the apparatus in De Vreese's ed.).
Thus by a forced uṇādi derivation two nominal stems śmīra / smīra were made up assigning to it the meaning of the verbal root cal. This could very well represent an older tradition. Anyway, following Kaul's etymology, ka-śmīra would eventually come to mean "[land] from-where-the-water-drained-away".
In this manuscript, Govind Kaul explains also the etymologies of the name Kashmir in the Kaśmīrī (kaśīra, kaśur, kaśūr) and Persian (kaśyapamar, kaśmar) languages.
Regards,
WS
-----------------------------
Prof. Dr. Walter Slaje
Hermann-Löns-Str. 1
D-99425 Weimar
Deutschland
Ego ex animi mei sententia spondeo ac
polliceor
studia humanitatis impigro labore culturum
et provecturum
non sordidi lucri causa nec ad vanam
captandam gloriam,
sed quo magis veri
tas propagetur et lux
eius, qua salus
humani generis continetur, clarius effulgeat.
Vindobonae, die XXI. mensis Novembris
MCMLXXXIII.