My first thought is the castle nut keepers (cotter pins or tabs) were not holding the nuts in place if the hubs were loose. It sounds like you were careful with your process but perhaps you missed or misunderstood something. A second set of eyes may get you the safety you need. Perhaps the drums weren't fully seated when the castle nuts were originally tightened allowing for enough play to push the grease caps off. Or, perhaps the inside bearing race wasn't fully seated in the drum prior to assembly. That would explain the water if the seals then didn't fully seat on the largest part of the spindle. Good luck and be safe.