The bright side is she's up and floating, otherwise, you wouldn't be needing this information. The not so bright side is you have a lot of work ahead. As always, having a professional do this job is recommended. Sometimes that's not possible, or in some cases, you are the professional. Let's break this down into simple segments because the sequence is important. Then, we'll get into the specifics.  At this point we are assuming the boat is secure and sound. If not do that first.
Our hypothetical situation is that the boat sank to the point where the electrical system was completely submerged. If you aren't this bad, jump in at any point.

Warning: Disconnect and leave disconnected all electrical power
               until the boat and the electrical circuits are dry and tested.

1. Disconnect the batteries
   
2. Remove all electronics and send them out to be cleaned by a professional.
   
3. Clean all loose debris from the boat
   
4. Clear all drains and remove all plugs
   
5. Remove all panels and access covers
   
6. Clean the boat with soap and water, ( engine, electrical, dash, cabin, everything ) Don't worry it's already wet and you need to remove as much of the salt, dirt, and oils that will coat the entire boat. If you can get a pressure washer, better yet.
   
7. Rinse well.
   
8. Rinse some more
   
9. With a wet dry vac, start sucking as much water out of the boat as possible, getting every knook and cranny.
   
10. If you have built in fuel tanks, it's time to make a call to a waste pickup company, so they can pump you dry.
    
11. Using an electrical contact cleaner and coating spray, start spraying all the electrical connections in the boat. ( if you have 120V on board, don't forget the 120V panel and all the electrical accessories attached)
    
12. Remove starter, alternator, carburetor, distributor, trim pumps, blowers, battery chargers, refrigerators, dashboard, etc., disassemble, clean, reassemble and test. Do not re-install or hook this stuff up to the boat, just yet.
    
13. Disassemble, clean and reassemble as many of the electrical connections and wire ends as you can. Note that if the boat is submerged in salt water, you should cut the wire back an inch and replace all wire ends. Don't forget the battery connections at the engine block. Note that marine components are water resistant and not water-proof.
    
14. If you have a  key switch, battery selector switch, and or reset breakers of any type, (especially 12V and/or 120V reset breakers)  remove and discard. (See item 13, sentence three, above.) Most batteries that are submerged under water will have to be replaced, but you can always check, charge, n test. Install new switches. Don't take a chance, replace it now while your in there.
    
15. Remove fuel supply line at engine and using a outboard primer bulb, pump the line and any water left in the tank out of the system. Add some fuel system dryer {water absorber} to the fuel tank and pump some more. Put some fuel in the tank and test flow from the fuel tank with the outboard primer bulb. (Before removing the outboard primer bulb, see item number 21, below.)
    
16. At this point we're ready to work on the motor. First check for sand in the intake manifold under the carb.[ If you see sand in the intake manifold, complete engine disassembly is required. If none is present, continue on]    Pump water and oil  from engine oil pan.
    If you have a sterndrive, you'll have to remove it to get the water out of the bell housing area. Clean and reinstall. It is usually a good idea to remove the shift cable core wire from the shift cable and blow it out with air. Then spray some light oil into the cable and reinstall the core wire.
    If you have a current model I/O or inboard, the flywheel housing is sealed and will hold water. You will have to loosen the lower flywheel housing shield and let the water drain out. Otherwise, the first time you crank the motor, you will fill the starter with water again.
    
17. At this point you need to pre-prime the engine oiling system. There are two ways to go about this, but it must be done. Pre-oiling the engine by cranking it, is not recommended. See our tools list for pre-priming solutions.
    
18. Reinstall starter, carb, alternator, distributor, harnesses, breakers and fuses. Do not install fuel filters or prime fuel system yet.
    
19. Reconnect battery and test dash and other components for function. Do not try to crank the motor, yet. Check the engine warning system if so equipped. Check gauge operation . Replace as needed. With the key "ON", check for operation of engine associated accessories such as blowers, trim pumps, hour meters, etc. Leave the system "ON" for about an hour and then check for any wires getting warm and/or accessories that could malfunction due to moisture. ( unplug the ignition coil and/or ECM if so equipped.)
    The best way to tell is to install a low amperage  ampmeter between the battery (+) terminal and the battery cable and see if the amperage draw increases while just sitting there. If it does you still have water inside of an item that is causing this to happen.
    (Make sure to remove your ampmeter and reconnect your battery before you proceed.)
    
20. Remove spark plugs and ground coil wire.
    If you are working on a diesel, see article below.
    
21. Slowly crank engine by tapping starter until all the water is removed from the cylinders. Spray engine fogging oil into sparkplug holes and crank some more.
    
22. Install new fuel filters on motor and prime the lines, filter, and carb. with the primer bulb. Be sure to check for leaks and the possibility that the carb is flooding the engine. Install your spark plugs and hook up the balance of your engine wiring.  On diesel engines, do the bleeding procedures from your manual.
    
23. You should be ready to actually crank the engine at this point. Try tapping the starter at first to verify that it is cranking properly and can make at least one full revolution without stalling.
    
24.   === (Work in progress)  See Below ===
    

Notes: About submerged upholstery and carpeting.

  Submerged carpet and furniture in most cases needs to be removed and disposed. However, I have seen some cases where they could be salvaged.
  Using a pressure washer and then a shop vac on the carpet as soon as the boat is raised, some times will be all that is needed. This depends mostly on the type of carpet in the boat. The marine grade and rubber backed carpets are the ones that can usually be saved. Unfortunately, a lot of larger cruisers are using plain house grade carpet in the cabins, and this carpet has to be removed.
   Couches with-out removable cushions will have to be disposed of in most cases, but removable foam type cushion furniture, can be cleaned.
Cloth cushions:
   Fill a bath tub or troth,  with cold water. Add a mild cloth's detergent per instructions. Then, add 1 cup of rubbing alcohol to 3 gal water. Submerge cushions in the tub and then squeeze or walk on the cushion to work out the dirt and sand. Drain and rinse cushion in cold water. Remove cushion from tub and place in a plastic cloths or wardrobe bag. Attach a wet vac to the bag with duck tape and suck the air and water out of the bag.

Note: Never wring  or twist cushions and or upholstery to get the water out and don't remove the cushion cover from the cushion to dry. Dry the cushion cover on the cushion. Some times you will need to reapply stain-guard or water repellency fluid if the cushion cover is a canvas product.

Vinyl cushions:
Remove vinyl cover from cushion and clean foam cushion the same as above.  Use any good vinyl cleaner on the cushion cover, being sure to do inside and outside of the cover, and then turn inside out to dry.

SALVAGING A DROWNED ENGINE

The first indication most people have of a drowned engine is on cranking.
The water in the cylinders, being incompressible, locks up the motor so that it will not turn over. Other indicators are a rising oil level (from water finding its way into the crankcase), or creamy colored emulsified oil, the result of water being mixed with the oil, sometimes with beads of water, on the dipstick or inside the oil filler cap. In any event, you must get the water out of the cylinders immediately; the longer a sits there, the greater the probable damage. On a gas engine remove the sparkplugs and spin the engine through at least two revolutions.
On a diesel engine, removing the injection is not particularly easy, and may cause other problems. It's sometimes possible to slowly ease the water either down into the crankcase or out of the valves by "bumping" the starter motor, repeatedly, flicking it on for just a fraction of a second. If you try this, though, set the engine controls so that there is no chance of the motor starting; and pause between each flick of the starter switch. If the engine should fire with some water still in the cylinders, there is a possibility of doing expensive damage, such as breaking piston rings and/or bending connecting rods. A safer method of expelling water is to remove the valve cover, identify the exhaust valves, and manually open them by pushing down on the rocker arms while someone else bumps, or spins the starter motor. Once again, if the engine can make two complete revolutions, the cylinders will be substantially clear of water. (Some small diesels have a decompression lever mounted to the top of the motor. This lever holds the valve open.)
Next, change the oil and filter, and then crank the engine. On a diesel, it's a good idea to have someone spray engine fogging oil into the inlet manifold while cranking, both to aid in starting and to lubricate the upper cylinders. Do not do this if the engine is fitted with a manifold heater or flame primer. After the engine has fired and been running long enough to thoroughly circulate the oil, say for two or three minutes, shut it down and change the oil and filter a second time. Start the engine once again and run it until it has reached normal operating temperature. Check the oil for signs of water, and change it again if necessary. Then change it once more within 25 hours' running time. With any luck, if the water has not been sitting in the engine for too long, you can save the engine: You will, of course, need to modify the exhaust system to ensure that the problem never recurs. --
                                                            By: Nigel Calder

( Don't forget to check for a broken impeller blade in your seawater cooling pump... )

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Nigel has several books he's written, see our Reference Library.