Draining down the pond and applying the hydrated lime to the minimal water that is left will have no effect on your downstream neighbors once the pond fills back up. It raises the pH too high for fish to live in the water, and when it's diluted the pH drops back down.

Here's another thread on hydrated lime to kill fish in a pond:
http://forums.pondboss.com/ubbthreads.php?ubb=showflat&Number=386504

www.hoosierpondpros.com

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3/4 to 1 1/4 ac pond LMB, SMB, PS, BG, RES, CC, YP, Bardello BG, (RBT & Blue Tilapia - seasonal).