It will depend on how much water, how long it's been in there and how frequently/infrequently you run the boat. The water is going to settle to lowest point in the drive. Enough and the lower gears and bearings can be siting in water instead of oil. The question is how much corrosion as a result? Two things can cause this to occur:
1) Seal failed
2) Water gets into the U-joint Bellows.
-> The large seal where the U-joint goes into the top of the drive spins. It gets lubricated by leaching drive lube into the seal, then the spinning sucks the lube back into the drive. If water gets in there, you'll suck water into the drive as well.
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