In Warspite Refit 2 I had a rudder servo, water proofed, and out in the open. To make it fit I had a little depresion in the water channeling. Some water would pool right at the bottom of the servo. This gave me problems until I cut a channel into the water channeling allowing the pool under the servo to drain. It might work the way you have it set up, can't say Ive seen it before. And if it does not work you and rip off the sides of the box and let the servo be in the open. Or add sides to it and make it a water tight box. One other thing to look at. You need to get 80-90 deg of throw on your rudder. The push arm you have has issues doing that. They bind up when pushed to the stern. The BC rudder gears work great, or hobby store gears at a 2to1 or maybe 3to1 ratio. I can't remember which one it is. Large BC pump with a high speed motor will get you 1gal per min out of the little pump outlet. I think the set up you have now (Small housing & motor) is about 1/2 to 3/4 gal a min. Something to consider.
radollar, I am almost done with my Des Moines. I am still working on a balance issue, the ship leans a little to the port side. But if you have any questions, just ask and I will let you know what worked for me. You can see several pictures of my boat under Our Ships. Good Luck Jeremy