Doesn't sound good. That gimbal bearing will go bad pretty quick when exposed to (salt) water.
The bellows keep water off the bearing from the outside, but there are no bellows on the inside- if you got water in the boat, the bearing and u-joint was probably submerged.
I've done an Alpha, but not a Volvo. However, my old Volvo is pretty simple to work on...I'm not sure about the Duoprop.
Good luck.