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Dry sump with a water filter is simple... air tools.
Except instead of using an air dryer (to separate water from/add oil to the air), you use a water/oil separator inline with a dry sump's pump/filter system. Water separation in a dry sump system could occur inside the holding tank, actually, since water will sink to the bottom of the tank.
A means for either recovering or disposing that water would need to be worked out, beyond simply draining the water from the oil.
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