First pass on this. Please let me know if you have any ideas or additional information
At one time or another, all artists have an area of paint that they would like to lift off an otherwise acceptable painting.
There are many methods of lifting paint off paper. Most of them are acceptable everywhere and a few of the more drastic methods may reclassify your painting as mixed media. The methods listed below can be used in conjunction or alone.
Brush and Water
This is the gentlest method and certainly the one to try first. It works well for non-staining colours.
Dip your brush in water and soak the area you wish to lift out. Leave it to sit for a short while (the paper should still be shiny). Then go back in with a dry brush and start lifting the paint gently from the paper. As the water soaks into the water colour paper, the paint will go back into the water layer and be easier to lift out. Wipe the brush off and repeat the lifting action. If you are positive it needs more work, get it wet again and repeat the whole procedure.
If you think that you might have lifted enough colour, let the area dry completely and go on from there.
Blotting is basically the same thing as using a paint brush, but it is less controlled and may lift a larger area than you were intending. Use a Kleenex (not the ones with lotion in them) or paper towel to blot an already wet section of the painting. This is will gently lift paint off the paper. Remember to change your blotter often or you will transfer the blotted colour back onto your painting.
This is the next step up in lifting paint.
Soak the area that you wish to lift and then scrub it lightly with a stiff brush (craft brushes are very good for this). Then lift the paint and water mix with a dry paint brush. If you have not lifted enough paint, repeat the gentle scrubbing until you are happy with the result.
A warning, too much scrubbing can result in a hole being created in your paper.
Another warning, this is VERY hard on paint brushes.
You can use an eraser to lift dry paint. A plastic eraser lifts less paint and a pink eraser often will lift more. This is useful for adding sunbeams or subtle highlights.
This method requires you to mask an area and then scrub it as described above. This is very useful if you are adding hard edged shaped into a painting. If you are looking for a softer transition, you should be looking at other methods.
Using masking tape, tape completely around the area that you wish to scrub out. Make sure that the tape is securely stuck down and then wet the paper and proceed to scrub gently. Once you have lifted the paint, allow it to dry, remove the tape and proceed with painting.
Exacto knives, Razor Blades and Fine Grit Sandpaper
You can also scrape an area free of colour. This is useful for highlights on water or other small very bright white areas that you are not going to paint.
Using the edge of the blade, gently scrape the painting where you want the highlight to be. Blow away the resulting paper fiber an see if it is what you want. If not keep working at it until you have achieved your goal.
Sandpaper can be used in much the same way. 100 grit is a good choice for this. Start with completely dry paper and gently sand at the area you want. For highlights on water, one or tow passes will likely be enough. Again, blow away the paper fiber and see if you achieved you goal. If not, keep going.
These methods are very permanent and it is easy to overdo them, so err on the side of caution.
White Gouache or Chinese White combined with scrubbing
A very useful method, but one of those that, in stricter circles may be frowned upon. Lift as much of the paint as you can using the other methods. Let the area dry so you can determine how much more lightening you need to do.
Then get either white gouache ( more opaque) or Chinese white and mix up a fairly strong solution of it. In the area that you had previously scrubbed, start scrubbing the mixture in gently, You should be able to lift more colour out and end up with a white surface. Apparently, this also stabilises the paper so any paint you add will look all right afterwards.
I have heard of this being used, but have not been able to find back up documentation on it. An instructor I had demonstrated it as well.
Mask off the area you are going to lift the colour from. Remove as much colour as possible. Then get household bleach and gently (with a cotton bud) dab it on to the area you want to bleach. Leave it to sit for about 5 minutes and then rinse many times with clean water.
My background is chemistry and everything about this method screams that that it is not archival.