http://revach.net/article.php?id=1616

Section: Parshas HaShavua   Category: Quick Vort
Parshas Va'eira: Where Did The Magicians Get Water From?
The magicians of Pharaoh did the same with their charms (to make water in to blood), and Pharaoh's heart became hard and did not listen to them". Where did the magicians get the water to change in to blood, if all the water in Mitzrayim turned in to blood?

 Some Meforshim answer, if an Egyptian purchased the water from a Jew in remained water. The Ibn Ezra answers, since the pasuk says "All the Egyptians dug roundabout the river for water to drink" (7:24) - that water below the ground did not turn in to blood.

I once heard yet another explanation. The Chartumay Mitzrayim were not performing real magic, rather illusions. They therefore took the water that was now blood and made it look like water. When they removed the illusion, it looked again like what it really was....blood.