Doug/Karen,
it's not in the engine compartment:
Under the aft berth, as you face aft into the cabin, the water heater is under the access cover directly in front of you. There is another access cover to the right (facing aft) of the water heater and the filter is in that compartment on the forward edge. It should be a racor 2oo series fuel filter/water separator. The standard installation has a metal bowl under the filter and you can open the drain - into a cup! to check for water, but if you haven't found it yet I'd just replace the filter element. close the fuel shutoff on the tank, Put some absorbant sheets and a plastic bag under the filter, then put a gallon ziploc around the filter and unscrew it. mount the metal bowl on the new element, fill the element with clean diesel, and screw it onto the head. There should be a bleed screw and a pop-up priming pump on the top of the head. open the fuel valve, pump the priming plunger until you get fuel out of the bleeder, then close the bleeder and try to start the engine. If you're lucky, whatever air got in will work through and you're done. If not, you'll have to bleed the engine by cracking open the forward fuel injector line and cranking until you get fuel around the fitting - then tighten