There are several ways water can get into the flywheel cavity.
The motor could have gone under water.
If the motor is rigged so that it is too low, water pressure could drive water through the shift shaft seal, while under way.
If in salt water, one or more of the core plugs in the bottom of the block could have rusted and is leaking water into the cavity.
If the boat is kept in the water with the motor tilted all the way down, it is possible that waves could force water under the engine cowling and the water eventually finds its way down into the flywheel cavity. You usually see evidence of mud or debris under the hood.
Of course, a lower casing seal, power head gasket, or seals associated with the water tube could have gone bad, allowing water to come up the vertical shaft.
You can try to take a bore scope into the starter opening to see if you can see anything obvious.
If you see no external evidence, then the only way to check for sure is to pull the powerhead and visually inspect.
As I am sure you know by now...the flywheel cavity should have no water or oil in it.
Good luck on your search.
Mike