Has anyone done this with their water bottle?

My gut says that this would be difficult.  Straw length and suction needed to actually get water from the straw are related, and I would think it would be quite a bit of work to get water out of the straw from that far away.

Even if you were able to generate enough suction to get liquid moving up the straw, gravity would pull all the water back to the bottle after every drink and you'd have to suck all the air out of it every time you wanted another drink.

There are lots of bottles out there that mount to your aerobars that have a nice convenient straw.

That system does exist, if I understand correctly, you are describing a Speedfill.  But that is a whole system that you install on your bike.

Two thoughts that I have on your modified proposal, would be (1) if they don't hand out bike water bottles but rather regular store version bottles, you'd have to unscrew and refill your existing bottle; (2) I wouldn't want to unscrew and refill a bottle or unscrew and replace a bottle in a race. 

The refillable bottles of all systems have a way to get the drink in without having to unscrew tops.  Thee is a reason for that IMO.

Definitely sounds possible.  If I were making one though I would invert the bottle rather than stick the straw all the way  to the bottom and put a camelback (or similar) bite valve on the end.  This way you could potentially avoid sucking all that air through such a long length of tubing every time as someone else had mentioned.

may not be very aero though

Put a strawin your water bottle and hold it just below your belly button and see if you like it.  My guess is you wont, that's about -2.5psi to suck against.

The speedfil valve system solves this as the straw stays pressurized.  That said, I didn't like the frame mount system, but I love the A2

True, would probably be cheaper, but one thing to keep in mind is that the speedfil system has been engineered to allow easy refill on the fly, either the A2 or frame mount.  I can't imagine being able to switch bottles on a home made system without stopping (take bottle out of cage, unscrew, screw on new bottle on, back in cage...) plus most long course tris offer plain water bottles as refill, can't use those with a nippled bike bottle cap

It's cheaper to just use regular bottles, and drink the conventional way...just sayin. 

I've gone through this whole process.  Used the PD aero drink, adjusted the straw, tried modifying it with a camel bak straw with a bite valve.

In the end...I just went back to standard bottles and cages.  One on the frame, one between the bars.

Done it, and it works well for sprints/olys.

For HIMs you need to be able to replace or refill the bottle (screw tops are hard to swap out while riding, and some races have gatorade-style bottles with the small screw tops vs. regular bike bottles).