Time-lapse seismic monitoring of subsurface rock property changes incurred by reservoir production processes is increasingly being proposed as a new diagnostic tool in efficient reservoir characterization and management. We perform a model study to simulate waterflood production in a light oil reservoir of Ottawa sand, and generate synthetic time-lapse monitor seismic data both pre-flood, and at two subsequent waterflood phases. Pore pressure and oil/water pore saturation levels are simulated in the reservoir due to two water injection well galleries by diffusive fluid-flow modeling. The pressure and saturation data are converted to rock density and both bulk and shear moduli, using rock physics calibration curves derived from laboratory data. Synthetic seismic reflection data are generated from the resulting spatially variable rock physics properties at three separate waterflood stages. In the presence of realistic noise levels, stacked and prestack migrated reflection images clearly show the extent of the water-invaded zone after production. Furthermore, we apply a prestack seismic impedance inversion method and accurately track the relative P and S elastic impedance changes in the reservoir rock caused by the varying petrophysical conditions associated with the waterflood production process.