I really like your setup! Looks very similar to what I got going, although much more polished. I really like the flashing, excellent idea! Is that a bottling bucket I spy feeding the water supply?
I think you’re on the right track with the recirculating method. I would make sure you insulate the bucket well, including a lid. Also make sure you are using a mag drive pump so you can control flow without putting undo stress on the pump motor. Another thing to consider would be to make sure the pump has
enough head to reach the top and still have an adequate flow.
Now for my questions
I am about to create a second level to my rabbitry and am wondering what you used as the angled, umm.. turd shield I'll call it?
What is the blue stuff on the top level? Is the top level 3 separate cages? Males?
Also, what did you use to get the water from the PEX to the rabbits, some sort of emitter?