You guys just insist I take things apart to show you stuff don't you?
You might need to click on these pictures to enlarge them so you can see my notes on the pictures.
Here is the back side of 'boat' - notice the position of the ladder bolts and the tiny hole - there is a tiny tank hidden behind that hole - the tiny tank holds a LOT of water (I mean A LOT!) The tiny tank is shown with a black dotted line in the picture so you need to enlarge it. Also notice the way the rudder is inside a rudder well molded into the hull - the top rudder bracket is inside against the roof of that rudder well.
Where the rudder shaft exits the tiny tank is well above the top of that dotted line - you need to bury the boat above the top of that dotted line for a LONG TIME to make water overflow out of the top of the tiny tank represented by the dotted line above.
Here is the back of boat from the inside - lets take off the covers and see what's going on here:
So with all the covers off we see that there is a tiny tank above the rudder well - this tiny tank can get water in it three ways:
Again, enlarge this photo to see the notes:

You can see that the tiny tank holds a LOT of water! A couple of beer cans at least.
1.Water gets into the tiny tank thru the top when the wet rope is used to set the rudders - it's a minuscule amount of water and should never be an issue.
2.Water gets into the tiny tank thru the tiny hole in the back of the boat - this is only a problem if the water can't drain out - if that hole is plugged the tank will overflow into the bilge.
3.Water fills up the tiny tank so high that the water comes out of the top of the tiny tank where the rudder shaft enters the top of the tank. This might be what the problem described in this post is suggesting.
Here is the deal - if your flooding that tiny tank with so much water that it fills up so high that it's overflowing at the rudder shaft opening at the top then the tank is not properly draining or the tank is full of crap n stuff and not working at all. There is no real situations where the back of the boat would be buried in the water that far for that long a period of time - in my case I have never buried the tiny hole heeling the boat - it's just too high up to do that. Water does enter the tiny tank from the bottom where the shaft enters the tank but that's SUPPOSED to be that way - the water needs to be able to drain from the bottom too. That's how the whole thing works.
I have had a following sea fill the motor well over and over and over again while sailing downwind in a bad breaking swell - and the water goes into the tiny hole and then it
DRAINS BACK OUT just like it does in the motor well. I don't get any water in the boat. The other thing you need to check is where the rudder shaft enters the bottom of that tiny tank - the rudder shaft should have slop around it where it enters the bottom of the tiny tank - that's because the tiny tank completely empties itself thru the slop between the bottom of the tiny tank and the rudder shaft - the slop around the top of the shaft where it enters the tiny tank is designed into the system - if you have sealed up that area so the water can't escape from the very bottom of the tiny tank where the shaft goes in then you have created the flooding problem right there. The bottom of the tank needs to seep water out around the shaft.
The system works perfect as designed. If you mess with the design by trying to seal up where the shaft enters the system will not drain properly.