Thanks everyone! I think i'll gather up the gaskets and head bolts i'll need and ask the mechanic who worked for me for 35 years on French diesels to give me a hand.
since the engine wasn't running, if water entered the trans, it'll be low in the pan. easy enough to drain off a quart or two to see if water entered the vent. is it not possible to suck diff oil out using a long tube placed in the fill opening? only place water would have entered diff would have been axle seals and they seem to appear to be in good shape without even slight seepage. if the trans has water in it, the solinoids in the valve body probaly suffered.
anyone here use and like deep creep penetrating oil? German car techs seem to perfer wurth products. I'm going to suck out the diesel fuel out of the cyls and replace is with some penetrant like wurth or deep creep before going further.
on another subject...water mix coolant. water is the universal solvent as we know and has the ability to disolve iron, aluminum, magnesium, etc. In a discussion with a MB engineer about using distilled water in the cooling system of a rare Benz, the engineer explained that distilled water was "mineral thirsty" meaning that it will in the presence of any metals will disolve up to its saturation point any metal it has contact with, whereas tap water already is saturated for the most part with disolved matter.
Although it sounds spiffy to use distilled water, it probably isn't.