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Why new tail light housing, as opposed to fixing the seal?
It would depend on how long the water was in there and how much damage it caused in the housing. You don't want corrosion in the electrical connections.
About the war in Iraq?
That you have water in your taillight? I doubt it.
They may have their own idea of the proper remedy. If you want something else, you might need to be firm about it and explain your rationale.