Many proposed low-latency anonymous communication systems have used various flow transformations such as traffic padding, adding cover traffic (or bogus packets), packet dropping, flow mixing, flow splitting, and flow merging to achieve anonymity. It has long been believed that these flow transformations would effectively disguise net-workflows, thus achieve good anonymity. In this paper, we investigate the fundamental limitations of flow transformations in achieving anonymity, and we show that flow transformations do not necessarily provide the level of anonymity people have expected or believed. By injecting unique watermark into the inter-packet timing domain of a packet flow, we are able to make any sufficiently long flow uniquely identifiable even if I) it is disguised by substantial amount of cover traffic, 2) it is mixed or merged with a number of other flows, 3) it is split into a number subflows, 4) there is a substantial portion of packets dropped, and 5) it is perturbed in timing due to either natural network delay jitter or deliberate timing perturbation. In addition to demonstrating the theoretical limitations of low-latency anonymous communications systems, we develop the first practical attack on the leading commercial low-latency anonymous communication system. Our real-time experiments show that our flow watermarking attack only needs about 10 minutes active Web browsing traffic to "penetrate" the total net shield service provided by www.anonymizer.com. Our analytical and empirical results demonstrate that achieving anonymity in low-latency communication systems is much harder than we have realized, and current flow transformation based low-latency anonymous communication systems need to be revisited.