Tiago da Silva led the way with four goals as the Black and Greens carved a five-goal interval lead in the twice postponed tie to set up a home clash with Guilsfield.
Richard Thomas, Dan James and substitute Tom Bowen also found the net.
Waterloo rallied in the second half, with Will Pritchard and Andrew Frost (2) gaining some consolation.
Four Crosses are also through in a rearranged tie as they swept aside Ffostrasol 3-0, with Gareth Jones scoring twice and Ian Kynaston getting the other after Paul Morris had saved an early penalty. The victors now face TNS reserves in the fourth round.