my use of water would depend on how long it took to the the engine back together and cranked. If its a day or two then water wouldn't hurt as you would fresh oil back in it then fire it to get the engine heated up. of course, I'd run that oil or oil/diesel mix for a few hours then drain oil and refill with fresh oil.

For coolant sludge water obviously wouldn't hurt anything.

To OP I'd get diesel in the crankcase ASAP. Water will get in between your crank bearings and you'll spin one for sure. then your looking at pulling the block and starting from scratch.

hmm... stroker time if you get to that point.