Top end breaking up could be a few things. Either an airleak in the cases or crank seal (flywheel side) or carb manifold seal, or electrical: faulty windings, coil, HT lead, plug cap or plug. Replace the plug, lead and cap first. Elimination is the only way to go. I had the same problem on mine. Luckily it turned out to be a faulty plug. Sorry I can't help on the major issue of no spark at all. Maybe the water corroded the pick up surface on/in the flywheel and stator. Try removing the flywheel and cleaning them up. While it's off, check for signs of leaking around the crank seal on the 125.