Sorry for your ordeal.
Any insulation that gets wet needs replacement.If other areas were not in contact with water then just leave in place. I would have the duct cleaned or replaced. I have been replacing duct work in crawl spaces in the bay side of Brick NJ. The dirt and grime that sat in the bottom of the bay was now caked up in side the ductwork. Who knows what is mixed in there. Could become a health hazard.
Regards,
CJ Mech

Thank you for your quick response. Just wondering if you are familiar with Reflectix duct insulation, and have any opinions about it. It's basically bubble wrap sandwiched between foil. Any thoughts would be appreciated. Thanks again!

it is crap. crazy r-values that it doesn't achieve.
invest in R-8 ductwrap.
mastic seal seams & joints of ducts as you
insulate.

foil bubble foil says it is Rxxx
but you have to have a 3/4" air gap
between the duct and the fbfwrap.
anyone who knows hvac knows you don't
have an air space next to ducts because it
condensates between the two spaces.
this is why fbf wrap isn't approved
by acca.

best of luck.

here is the link I couldn't find the other day.
http://www.energyvanguard.com/blog-building-science-HERS-BPI/bid/29497/The-Foil-Faced-Bubble-Wrap-Sham-Understanding-Radiant-Barriers

I would not use the reflectix. I agree that it is poor in performance compared to the duct wrap as previously suggested. However, you know you are in for it again, unfortunately. How many times do you intend to do this? Two products I'd look at for replacing your current system would be a Rinnai Energysaver wall furnace and/or look at the minisplit heat pumps. No duct work. The interior evaporators will be mounted high on the wall and unless the whole first floor is under water you will not be faced with this hassle/expense/replacement. Stick with the top brands of mshp. Fujitsu, Mitsubishi or Daikin. I have Fujitsu's in my home as well as the Rinnai'. very comfortable and very efficient.

Thanks everyone for your advice regarding Reflectix. Jackfre, the idea of minisplits has crossed my mind, I guess I should do some more research on it. My house is a 2100 sq. ft. ranch with fairly large open rooms and cathedral ceilings. When I mentioned the thought of minisplits to family, they thought I was nuts, but its not like they are experts. Again, thanks for your suggestion.

one of the frequent posters here Ionized
did mini-splits for his home. after much
research.

you should start a thread asking his input.
or see if you can contact him via his user page.

to get hvac pro's input on mini-splits
you should post at www.hvac-talk.com

best of luck.