I would say you are "more than likely" drinking too much water and are probably still dehydrated given that you experience a dry mouth. Do you also experience a dry nose, or dry eyes?
There are two main factors in dehydration:
Amount of water
Water retention, which is affected by electrolytes.
How often are you going to the bathroom? And what color is your urine? I'd say if you are going >5 times a day and your urine is clear, you are still dehydrated. Dial back the water intake to around 60-75 oz, add some sea salt to it, or add more salt to your food to improve retention. Mix and match.