Water boiled away during canning - now what?
Yes, reprocessing is okay, and it's probably a good idea. Steam doesn't necessarily transfer heat as well as boiling water, so if you end up with too little water, the odds of unsafe results increase. To get the safety out of the process, you have to have followed all the steps, and that includes keeping the water level high enough.

The most obvious way things could fail is simply by not getting good seals. But you also didn't heat the contents well enough, and that's part of the processing too.