Re: 86 alpha 1 and water in sterndrive?
If it has in fact ingested water the drive needs to be pressurized with air and checked for leaks with a leakdown pressure tester. This will tell you if any of the seals are leaking water. I would start there. If it fails it will need some work. I bought a Merc pressure tester and check my drive every time I change the gear oil to make sure the seals are ok.
Start with the pressure test and go from there. If it has to come apart to change some seals you can clean up the gears and bearings to an extent. Once fixed I would flush it out with alot of gear oil before reusing. Then change it 5-8 times after about 5-10 hrs each time just to be safe. Gear oil is cheap and drives are not.
I can post of pics of what water does to an Alpha's inners when mixed with the gear oil and not changed.