Place a colander in a 2-quart glass bowl. Line colander with 4 layers of cheesecloth, allowing cheesecloth to extend over sides. Spoon yogurt into colander. Cover loosely with plastic wrap; refrigerate 12 hours.
Spoon drained yogurt into bowl; discard liquid. Add 1 1/2 T water, mustard, vinegar and garlic. Stir well.