Over the years insurance technical staffs has directed the recovery of hundreds of vessels which have been sunk. They found that the opportunity to save the expensive engine is relatively easy if it's done promptly and properly. While it is certainly preferable to have a mechanic salvage an engine, this may not be possible immediately after a hurricane but for sure in a inland lake. It may be up to you to protect your property.
NOTE if insured: Reasonable expenses incurred in salvaging your machinery are covered under your insurance policy by what is known as "Sue and Labor".
Machinery left under water too long corrodes. Machinery submerged in salt water corrodes much faster than in fresh water (and is more vulnerable to electrolysis or galvanic action). Generally, you want to raise the boat as soon as possible, certainly within a few days, but …
Leave the machinery submerged until you or a mechanic are available to spend three or four hours tending to the equipment. Once the engine is exposed to air, corrosion accelerates tremendously. The experts all agree that saving a few hours between raising and treatment will make the difference in a successful engine salvage.
As soon as possible, disconnect all batteries and shore power. Besides the safety consideration, this will prevent electrolysis.
Within minutes after raising and before anything dries off, hose down with fresh water. Don't be shy; a little more water won't hurt but dry mud or salt will make things worse.
Remove the starter and alternator. They can be salvaged, and your actions now will reduce the time and expense to rebuild them. Flush them again with fresh water by running the full flow of a tap or hose into all openings. Then place them in a warm, not hot oven, for an hour or two or dry out.
With a gasoline engine, remove the distributor cap (if it has one) and dry out the inside. You may want to replace points, condenser and coil as you would if you were tuning the engine.
On a diesel engine, look for a drain plug on the bottom of the blower housing and remove it to allow any water to drain. If it is a turbo charged diesel, remove the turbo unit from the engine. It will have to be cleaned and checked out and reinstalled by a qualified shop.
Next, get the water out of engine. To do this:
Remove the spark plugs (or injectors in a diesel). Use a turkey baster to suction water from the cylinders.
Remove the drain plug from the bottom of the oil pan and drain the contents in a container for proper disposal. (Remember, you are responsible for oil spills). In some boats the drain plug is not accessible and the oil-water mixture must be pumped out as in an oil change. A siphon hose such as used to refuel portable kerosene heaters or an oil change pump could be used to accomplish this.
Fill every space inside the engine with lubricating oil or diesel fuel (which is easier to work with). Replace the drain plug and fill the crank case with the oil. At the same time, pour oil into the carburetor (if it has one) or air intake system until it flows out of each spark plug hole thereby displacing the water. Now, with plugs or injectors removed, turn the engine over by hand using a wrench or bar (or with a borrowed starter). Turn the engine over several times to distribute the oil. Refill the cylinders and carburetor to overflowing. Now you can wait for a mechanic, or if you have the mechanical inclination to do the work yourself, then proceed with the next set of steps.
Change the fluid or oil in the transmission or V-Drive.
Check for water in the fuel line and tank by removing the filter and draining the line plus a pint or two from the tank. Continue draining until all water is removed. A few drops of water can stop a gasoline engine, but will do severe damage to a diesel.
Now you can drain the engine of oil, reinstall the starter and alternator and add a proper amount of lube oil. Turn the engine over (using the starter) with the spark plugs removed to dispel fluid from the cylinders. Use short intermittent bursts from the starter.
Install the plugs and start the engine. Watch the engine and gauges carefully and shut down immediately if you suspect a problem. Run the engine about a half an hour to get everything hot. The heat will dispel any remaining moisture.
A few more oil changes and lots of preservative spray come next, but a qualified marine mechanic should call the shots from here. His expertise will allow him to determine whether all traces of water, sand and mud are out of the engine, whether electrical connections need to be replaced, whether or not the starter, generator and carburetor are OK, whether other items needs service now such as battery switch, pumps, generator, battery charger, etc. And in the end, you may have saved your engine and considerable expense and aggravation.
I hope this helps.