TQC differential lock system/ HELP!

[smarinel@neosoft.com (Steve Marinello@Newpark)]

I've got a sort of strange problem here.  The TQC's differential lock
system is relaly screwed up.  The diffs don't lock, but the indicator
lights come on sporadically.

This car was semi-flooded on the road, as some of you will remember. 
Hydrolocked the engine and all, but the engine appears to have survived
that without ill effects.  The rest of the car is the problem.  The exhaust
is iffy, so State Farm may end up paying for that.  And the clutch slips,
with a strange, brief schriek, on occasion.

Had it checked and retuned at the New Orleans dealer, Crescent City Motors.
 God, do I miss Stammeler in Boulder!  Anyway, they couldn't find anything
wrong with the clutch, readjusted the belts, did the plugs, oil, changed or
cleaned oil and air filters and replaced the starter...which now sounds
distinctly un-'83 TQC/UrQuattro and more like a '90's type of starter (they
checked numbers, but????).

Anyhow, I can figure all the other stuff, but any ideas on the diff system?
 They say that there's a vacuum leak somewhere (gee, since it's a vacuum
actuated system, that took lots of brain power), but they can't figure the
lights ( how 'bout water in the lines causing intermittent pressure/vacuum
surges that trigger the light switches?) and they say that the center
differential is shot nad can't be actuated manually.  My bet is that the
actuator is shot, not the diff, or I would be able to tell that driving. 
Am I right on that??  Steve, Dave, Glen, Scott..???  Of course the big
question for me is, how can getting flooded mess these things up?

By the way, this '83 has the two position console switch, but the old setup
on the actuators.

As always, any and all help and ideas are more than welcome.  Confusion
reigns nad the worst part is that I rarely get to drive the beast anymore
with the @#$%^& Crown Vic company car and all the travelling.  But it's not
on the block yet, Bruce, although there is supposed to be an S6 wagon
coming in here real soon.

TIA,

Steve

Stephen A. Marinello, Ph.D.
Newpark Resources, Inc.
P.O. Box 6411 - Metairie, LA 70009
504/838-8222