I had this problem on my "fresh" engine when it sat before I put it in the boat. I actually broke the bolt off the front of the engine using a giant breaker bar to try and get it turned over. I ended up taking it to a local mechanic. I'm not sure what they did but they were able to remove the end of the broken bolt, install a new one and get the engine "un-stuck" by using an air-compressor + fitting in the spark plug hole to force the engine over.
I suspect you have a different problem, though -- If the starter was full of water and you can't get it to turn over (even with the spark plugs out), I only see 1 possibility -- hydrolocked.
Do you have a remote oil drain? Drain all the oil and see what comes out. Otherwise -- pump all the oil out and see how much water you find in there.
Former owner of a 1987 Supra Saltare. Current owner of a Malibu 23LSV.