Using a long breaker bar on a stuck engine is a good way to break things internally. Rings and ring lands can be easily broken with excess force. You first need to determine if it is the engine or the lower unit that is seized. As for the starter, loosen the bolts and the bendix should drop down.
Drop the lower unit and then see if you can turn the engine. If you can, then the lower unit has an issue. If you can't then the engine is the problem. Look into the plug holes with a led pen light and check for signs of rust. If rust is visible, chances are the engine is seized and even if you get it loose, it will soon have an even more serious issue. But the trick to loosening an engine is is to inject a good penetrating lube into each cylinder. I happen to like Tri-Flo which works extremely well on rusty stuff. After spraying each cylinder liberally, walk away for a day or two. Spray again and walk away. After the second wait period, now try the breaker bar GENTLY. Rock the bar both ways to see if there is a tiny bit of movement. If not, repeat the spray and walk away. You may have to do this several more times before you get slight movement. Once movement is achieved, spray again only now rock the engine back and forth. Each time you should gain a little movement. Keep spraying and eventually the motor will free up. Check compression and if it is ok, dunk the boat, add extra oil to the fuel and run the engine. Be gentle with the throttle for a bit before attempting any high speed runs. If things seem to be ok, go back to the standard fuel/oil ratio and hammer down. You will soon learn if any internal damage was done. You would be advised to try and determine why the engine locked in the first place. Such as where the water came from or was there a lack of oil due to a malfunctioning oil injection system.
