Is it possible to hydrolock running engine?

[karwas]

Hello,

I am writing this from the ocean, 30 miles from Moro Bay, so I will keep it brief.

Yesterday, about 2 hours after departing from Monterey and sailing
south in rather heavy seas (steep, short waves crashing on the stern)
my engine (Yanmar 4JH5E with SD50 saildrive on Beneteau OC45)
suddenly stopped without any previous warnings.

The water temperature was OK (~80C), there is a clean oil in the engine,
no indication of overheating or anything obvious.

Starter is not able to crank the engine. I have loosen the belt to eliminate
possibility that balmar alternator or water pump is blocking an engine
and still starter is not able to crank. The crankshaft pulley was able to
move maybe 1/2 inch, not more than that. But it does not looked like
a seized engine to me.

I suspect that pinion shaft on the SD50 saildrive got seized, and is
preventing the engine from cranking, mostly because the oil level
in the transmission was very low (below bayonet) but before I will
go anyfurther with disasembling saildrive I wanted to ask:

1) is it even possible that engine hydrolocked from while it was running?
2) is there anything else which could went wrong and I could test
in the ocean?

Thanks,
Przemek
S/V Festina Lente