I'll be the first to admit from the get go that I don't know A/C. Never had one of them early cars in which it worked..

That said though... I would expect the water you encountered is condensation from teh evaporator under the dash. Which is normal, but I would think there would be a drain tube that goes under the car onto the ground... Ya take hot moist air from inside the car, and put it next to a cold evaporator, that water in that air is gonna condence and has to go somewhere. In your case, it sounds like it ain't going anywhere.

Now.. *maybe* that foam thingie you mention is not glued down appropriatley, and it was floating on that water..hence, blocking the way for the cold air.... just a wild guess though.I'd shoot to keep that airway clear though if that seems to be the cause.

The A/C does run on a separate fan motor from the heater, so don't go replacing your heater fan or anything crazy like that!

Best of luck with it!
-Matt
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-Matt '70 145s, '65 1800s, '66 122s wagon, others inc. '53 XK120 FHC