Waters, 22, dislocated the elbow when playing for WAFL club Claremont last year and was sidelined for the Eagles' last nine games of the season.
He had returned with Claremont after serving a two-game suspension in the AFL.
West Coast said in a statement on Wednesday evening that Waters' elbow had not responded as expected and that the club would "seek medical advice to determine its next course of action".
Waters has played 61 games since his 2004 debut.
Meanwhile, defender David Wirrpanda has been forced to withdraw from the Indigenous All-Stars' clash with Adelaide in Darwin on Saturday night.
A virus will see Wirrpanda remain in Perth and he has expressed his disappointment at missing the game.
