Well, that's what I'd have to term a 'butchered bitsa', especially with the weird mods to the muffler.

It's basically a 1950's engine and blade disc, on a 1970's Utility chassis.
Ahhhh Bugger

.. was hoping it was a complete original mower (though the red painted engine on orange base did make me a lil suspicious)

.. any idea or pictures of what the original base is suppose to be for that particular engine ? As with the muffler .. is that not an original victa muffler ?
If the engine still turns over, it may be salvageable - water in the cylinder is not necessarily a major problem; water in the crankcase usually is, due to the rolling element bearings in there. Best thing to do, is to strip the engine down pronto, and give the big end and main bearings a good shot of something like WD-40. I'm not an admirer of WD-40 as a lubricant, but it does do a good job of displacing water.
Managed to get the cylinder head off and had a peak into the crank-case .. didn't see any water, seemed mostly dry... so hopefully when I get it completely dismantled I can have a better look.
You'll need Whitworth [BSW/BSF] spanners for the barrel, head and crankcase nuts though, and either a 13/16" or 1" AF ring spanner [or that size socket and an air rattle gun] for the blade disc nut.
Just my luck.. 90% of tools (sockets at least) I have are Metric lol and the imperial are 12 sided

.. managed to find a socket and spanner with correct size though.. everything came apart pretty easy.. nothing seized (except blade boss still stuck)
There's a bit of a trick to getting the crankshaft boss under the blade disc off - see
THIS past thread.
i followed that link, but I'm not 100% sure Im doing it right. I layed the engine on its side with the boss/shaft sticking out the side. I stuck a club-hammer under the boss and gave it a few light taps with another metal hammer.. no budge.. not sure if this is a slip on type or threaded (if you can get threaded). im a little hesitant to hit harder in-case I damage the boss

I've got a butane torch here.. dont think it'll be hot enough to heat the boss up though..