mjn,
I've just had a look at the original image for 1861 on Ancestry, and it definitely says Waterloo. I don't even think it's difficult to read, although Ancestry have it transcribed as Vaterlos, so perhaps Waterton wasn't too bad a guess.
Anyway, following up from that, Christopher Hey married Sarah Fox or Sarah Ann Milnes in Dewsbury, Sept quarter 1842 (from FreeBMD but you can see it on Ancestry as well).
Sadly, Familysearch doesn't reveal any obvious candidates for Sarah in Huddersfield/Waterloo, or anywhere else for that matter. In fact, if she was born in Waterloo, she could have been christened in Almondbury, looking at the map.
I think your best course of action now is to send for the marriage cert (assuming you think I've got the right marriage!) and see what other names and information you can glean from this.
Hope this helps.
Jon