Recent Hubble Space Telescope (HST) observations of the densities of neutral OH molecules that coexist with and are precursors of the plasma ions have constrained models for the plasma sources. An orbital simulation model of the evolution of H 2 O molecules emitted from the satellites and the E ring is employed to put additional constraints on the possible plasma/neutral sources in Saturn's magnetosphere. We find that a large H 2 O source concentrated near the orbit of Enceladus (of the order 10 27 H 2 O molecules/s) is needed to account for the observed OH neutral cloud. We suggest that a large amount of optically unobserved material near Enceladus could provide the "missing" H 2 O source. A Monte-Carlo collisional transport code for sputtering of ice surfaces is developed and applied to the E-ring grains. Grain lifetimes are found to be short (โผ50 years for 1-ยตm grains and only a few years for 0.1-ยตm grains), so grains must be resupplied regularly to keep the E ring in the present state. Orbital collisions between icy fragments, possibly remains of a disrupted satellite near Enceladus, are the suggested mechanism for replenishing the E ring.