Glad you enjoyed it! I think late August, September, and even early October are great times to be in the Sierra. In my limited (four years) Sierra experience, at that time of year, mosquitoes are usually gone (although in wet years, like 2011, they linger on into September). After Labor Day, the crowds seem to taper significantly. This year was a dry year, and I don't think we saw a single mosquito. We didn't bring DEET or headnets, expecting this to be the case.
In regards to water: 2013 was a dry year--the second in a row. But I think more problematic than any dried-up-water-source issues were situations where we were told there was no water for X miles, so we loaded up, only to find there was water available when we got there. All in all, only a few dry stretches, and they simply weren't problems. Tons of water in the Sierra.
In regard to crowds and busy campsites: well, first of all, I half-jokingly say that nobody hikes the JMT for the solitude. So we saw people where you expect to see people: Little Yosemite Valley, Mono Creek Crossing, Wood's Creek Crossing, etc. But there were a couple of times where we did have a hard time finding a decent site--the first was ascending Lyell Canyon. Every obvious campsite within five-hundred feet of the trail or so was was occupied, from the first legal camping, to the site we found, which was about 0.6 miles past the Ireland Lake junction. This was a surprise, because at the time, there was no access from the west to Tuolumne Meadows--120 was closed due to the Rim Fire. We thought Lyell Canyon would be a ghost town. Clearly, we were wrong.
The only other places where the obvious camping seemed crowded were Garnet Lake (we didn't look around too much, but the obvious sites were occupied; we moved on to Rosalie Lake), and descending Wood's Creek from Pinchot Pass, where for the last few miles or so before Wood's Creek crossing, there simply isn't much (obvious) good camping, and the few sites we could find were occupied. We just pushed on to Wood's Creek crossing, which of course has a bazillion sites.
Note than in any of the cases above, we could've asked to share a campsite, or camped closer than we thought polite, and I'm sure it would've been fine. We're not that needy--both with bivies and tarps, we only each really need a flat space the size of a person. In some places, that takes a little hunting, but presumably it gets easier with experience. It was never really problematic, just surprising in the few places I mentioned above.
So to summarize--yeah, it's a great time to go.