I had a very distressing first birth, with epidural that only worked on one side and massive tearing. Second birth was better, but I still tore. Third birth was in water and was utterly amazing. The water was warm, comforting, reassuring. It gave just enough pain relief that I was no longer overwhelmed by the contractions. I could certainly still feel them, still needed to 'moo' through them, but I could respond to them and do what felt right to me, rather than just wait until each contraction finished. The water gave me enough support that I was able to be upright, in positions that I could not have maintained on land, and I was able to stay upright and relaxed.
I was only in the water for about 10-15 mins before dc3 was born, in the water, but the effects were so helpful that I gave birth to an 11lb baby without pushing and without tearing. It was the most peaceful of my births - it almostdid not feel like hard work!
Needsanswers, have you had a chance to debrief with a specialist midwife? It's an opportunity to discuss your previous labour and go through your labour notes with a midwife who will understand, explain what happened, and accept fully your feelings about your experience. It's is an invaluable way of dealing with the distress that your previous labour has left. I found it very helpful in preparing for my second labour.
Also, IME, a positive labour experience virtually wipes out the distressing experience. I now remember that my first labour was distressing, but I remember it in an intellectual way, not an emotional way. It's a bit like remembering that labour was painful, but not remembering the actual pain.