In a dutch oven, combine the water, garlic and 3 cups of the milk. Cover and cook over medium heat until the mixture barely starts to simmer.
Reduce heat to low and add potatoes and salt. Cover and cook, stirring occasionally, for about 30 minutes or until the potatoes are tender. Stir in parsley, pepper, nutmeg and remaining 1/2 cup milk.
Remove pan from heat and let cool for 5 minutes. Puree in a blender or food processor, working in batches if necessary. Return puree to dutch oven and reheat breifly. Stir in butter.