Sounds like the water caused rust in the transmission somewhere.
I'm just guessing of course.
I would not go fast or far and dressed for disaster and Always have a finger on the clutch.
Someone has split the cases and might have a better idea what is going on.
How much water was in it?

The external  shift mechanism, is located low on the left side casing,behind the front drive pulley ,perhaps water found it's way in when the motor was flooded. I might try pulling the seal around the shaft (you'll need a new one) , and lean the bike to see if water comes out ,(nothing should,  these parts should have only a light film of oil sprayed on them when assembled) . but water may be evidence of rust damage and may defeat complete shift drum rotation ,causing noise.