Warm water should be fine - it helps to dissolve any fine particulate matter in the meringue powder or powdered sugar faster. The likely reason the icing separated so fast is because it was too loose to start, and/or had fewer stabilizers (cornstarch, gums, cream of tartar, etc.) in one or more of its ingredients. Even so, it separated so darn fast! My guess is the organic powdered sugar isn't as absorptive as normal powdered sugar, perhaps because it has no added cornstarch. I'd check its packaging to see and do some controlled tests (changing just one variable at a time, but not all at once), if you're curious to determine the root cause. Otherwise, I'd just return to the recipe that worked for you previously.