Checking of Oil

"Checking for water contamination is simple _ just check the engine oil and transmission fluid as you would normally (if you don't know how, read the car's manual). If the oil or transmission fluid is milky or chocolatey then that's a sign of water contamination."

http://www.quality-trans.com/faq/faq6.htm

http://www.bangkokpost.com/life/family/145396/checking-for-flood-damage

How much water do you suspect to be in the oil? A small amount may not show with the suggestions given. The most definitive way is to send a sample to a lab that does that kind of testing. I use Blackstone Labs in Fort Wayne, IN. Check their web site for more information (wwwblackstone-lab.com).

check this site

www.machinerylubrication.com

this has very useful articles on oil, contaminations, filtering etc (almost everything to do with hydraulics)