Everyone is sure it's water? Mr Ski in NC made a VERY valid point. Water separates out. It's milky, that's not water. It's an emulsion.
Water beaten into the fuel will emulsify. Pumps can do that. .
He said the contents of the Racor were milky.... is his pre-pump?
I am going to suggest here that the injection flushing needs to be done post haste as water in the system could start rusting the injectors, their feed lines AND the injection pump which will add hugely to the expense.
Deal with the fuel once this is done or as you are waiting for someone to deal with the injection system. Do not wait.
What should I open up to flush the injection pump? I took the rubber hose off between the pump and the secondary filters and it looks like there's water in the fuel there so Im sure its in the pump itself. Where should I pour in fresh fuel to flush it?? The lines to the injectors?? I'm not sure what all this stuff is on the pump itself...Get a jug of diesel and flush the injection pump , lift pump, injectors or those repairs will make the fuel look cheap. Use a filter between the flushed parts and the jug.
I know I'm hammering but I am also serious.
I have seen people put immediate attention off because they think something else is more important and end up with serious repairs up to a total rebuild.
You won't need that, the total rebuild, but that injection system if it needs repair will not be cheap and may well be avoidable with a few hours of work. It may not take much water to start the rusting process and tolerances are tight for proper operation..