Long story short, we hauled it out, drained the air box and carp, pulled the plug and turned the motor over to pump out the water, got it going and ran fine the rest of the day. Yeaserday and today I changed all the fluids and filters repeatedly till the oil and dif fluid ran clean, running it for about 30 minutes between each change, then changed one more time for good measure.
After reading these lines, I feel you might have trashed the engine. There is absolutely NO reason to run an engine that has had water in it.
You swamped it and then ran it the rest of the day on milked oil?
That's not good.
I've swamped engines before because I ride in deep water and mud. If an engine stalls out or somehow takes a drink; do not start it!
Stand/winch the bike upright (as much as you can on a Rhino) and drain the water out of the exhaust.
Pull the spark plug and use the starter to pump any water out of the cylinder and head.
Drain the oil and filter.
I'm not sure if the Rhino engine cases are the same as the Grizzly, but if they are, draining the engine oil from the drainplug will not drain all of the oil. The Grizzly has a sump under the wet clutch that holds a small pool of oil... and water/sand if you swamp it. You can lay a Grizzly ATV on its side to drain this sump but it may be more tricky with a Rhino. Still... you need to account for this sump in the engine! Pouring 2.5 quarts of fresh oil will just dillute the fresh oil with the funky stuff you're trying to drain.
Two or three oil changes won't "fix" a swamped engine [provided you haven't already run the bik with milked oil]. On a Grizzly 700/550, we have had to change the oil upwards of NINE TIMES before there was no milk.
Finally, when you are changing the oil, DO NOT START THE ENGINE to circulate the oil. There's just not a reason to start it. With the spark plug removed, crank the starter for a while and dump the oil. Repeat the process until the oil is clean.
You might say that is a lot of oil wasted but I promise you it's cheaper and easier to change the oil nine or ten times than to rebuild an engine. Running an engine with miled oil is a bad idea. The "milk" is suspended water, and water doesn't lubricate the way Yamaha engineers built that engine.
On Highlifter where many of the mudders like you and me hang out, it's common for people to swamp a bike doing a similar proceedure starting it and running it with milked oil... then 6-9 months later make a post about the best "big bore kit since I got it tore down."
I wish you good luck- maybe you'll get lucky. You'll know soon enough. I write this for other Yamaha brothers to take into consideration if/when they swamp their bikes.