Water gets in via the engine lid side grilles and collects in the bottom of the hell holes on each side of my 914. I can't see any drainage holes: should there be?

Yes, there is a nickel size hole in both, they kind of point towards the center of the car a little. The factory installed plugs in the hole with very small slits in them for drainage. Once blocked with crud the water backs up and rust begins. It would be easier to jack the car up and inspect from underneath to see if your plugs are still there and pry them out with a screwdriver. I found them in my 75 that I bought last year, but luckily it was a garage queen and never got wet enough to get rusty. Pull them out, then oneday when you pull the engine you can sand and POR15 those areas, if they are not rotted out. hope this helps

Great! Yes, that helps a lot. I will take a look underneath, and see what's what.

Thanks.

Let me know what you find.