Here's one set of explanations I found for how dams can affect the water flow (both quantity and quality) downstream as compared with before a dam was put in:

By trapping river-borne nutrients, dams can lead to the growth of toxic algaes. Massive algal blooms in reservoirs in the ex-USSR, South Africa and California have rendered reservoirs unfit to drink. Four hydro dams in California have nearly killed off the fisheries of the Klamath River, and made the river unsafe for drinking or swimming.  Water stored for months or even years behind a major dam may become lethal to most life in the reservoir and in the river for long distances below the dam. Reservoirs that receive treated effluents from upstream towns and cities are more apt to have this problem.  

Dams also lead to riverbed deepening for tens or even hundreds of kilometers below the reservoir. Riverbed deepening can lower the groundwater along a river, threatening vegetation and local wells in the floodplain and requiring crop irrigation in places where there was previously no need.

Tropical reservoirs are particularly prone to colonization by aquatic plants. In addition to causing other problems, mats of floating plants can lower reservoir levels. Losses of water from evaporation and transpiration in weed-covered reservoirs can be up to six times higher than those from evaporation in open waters.

Because they greatly increase the surface area of water exposed to the sun, dams can increase evaporation. About 170 cubic kilometres of water evaporates from the world's reservoirs every year, more than 7% of the total amount of freshwater consumed by all human activities. The annual average of 11.2 cubic kilometres of water evaporated from Nasser Reservoir behind the High Aswan Dam is around 10% its storage, and is roughly equal to the total withdrawals of water for residential and commercial use throughout Africa. The proposed Epupa Dam reservoir would have evaporated more water than the nation's capital city uses in a year.

Rising salinity (which ruins the land for farming) is another risk made worse by evaporation from reservoirs and changes to flows downstream. High salt concentrations are poisonous to aquatic organisms and corrode pipes and machinery.

Dams change the timing, amount and chemical composition of a river's flow, leading to dramatic changes to groundwater-storing floodplains and wetlands. Such changes can lead to the destruction of forests, which among other things help regulate local climate. Kenya's Tana River floodplain forest appears to be dying out as it loses its ability to regenerate because of the reduction in high floods caused by a series of dams upstream. The Lower Zambezi has lost much of its rich floodplain and wetlands due to upstream dams, with wide-ranging and costly effects throughout the ecosystem.

Hope that helps as a start, but perhaps an expert in the field will be able to chime in as well.