This is actually a manicure I did a few months ago that I never posted. It was done over top of the water color nails I did.
The "grunge" or distressed look was simple to achieve. I waited until my nails were completely dry and then did a thick coat of Sally Hansen Black Out over top and top coated. Once again, I waited until they dried. Then, I used a cotton swab dipped in acetone and gently rubbed away some of the black polish. I was careful not to remove the underlying colors. Once I had gotten the look I wanted, I top coated again. Done!