I'm glad to hear you're making some progress. You may want to coat the part of the motor leads that you think water is getting in from with liquid electrical tape to prevent "hosing" as I call it where water travels down a wire between the conductor and the insulator.
For batteries, are you using the 26650 batteries we've been recommending? Unless you're on throttle setting "5" (OpenROV cockpit starts on setting 3 by default) the ROV should not brown out with two thrusters running. Perhaps only one of the battery packs is actually giving you power..
Also, when you apply the Teflon tape, you may want to take extra care to make sure there are no wrinkles in it that form as these may create a path for water to travel beneath the O-Ring. The Teflon tape I use is wide enough that quite a bit ends up hanging over the inside edge of the endcap (which I just bend over against the inside face). It looks like in your photos that the tape your using doesn't quite make it to that inside edge.
I think I wrote it down somewhere on the forums, but if you like, I can let you know the specific brand of Teflon tape we've been using.
I hope this starts to work out for you!