Jon,
I have been taking your original comment that the car drives normally when up to temperature at face value. If the engine is performing normally when up to temperature, seemingly producing all its power, and averaging the 50mpg plus you would expect when driven normally- then you don't have any mechanical issues with the car. If that is the case, personally, I would stop trying to test pure mechanical factors like compression. A bent con-rod will mean it misfires all the time, and likely has a knocking bottom end that you would notice instantly.
However,
this US document (found by Googling Mercedes P026685) suggests that Mercedes know of an issue with water entering the OM251 engine and hydrolocking it - in this document's case, through condensate from the charge cooler, not flood damage. This triggers the cylinder 2 P026685 error code you are seeing, and triggers a warranty replacement of the engine.
This suggests to me that when water does enter the engine, it is normally cylinder 2 that suffers - all seems quite co-incidental given your circumstances.
If you are not 100% confident on the 'driving normally' statement, perhaps a compression test is wise as a first step. I think garages may be reluctant as removing glow plugs from a few year old diesel can often result in snapped glow plugs, drilling out said snapped glow plug, and a load of extra pain. I think you need a good Mercedes specialist, not a local, back street garage.
For me, it all hinges on how confident you are of the driving normally assertion.
If you are confident, I think a wise investment (£200 ish) of a diagnostics tool, like iCarSoft would pay dividends here. You can read fault codes, but much more importantly, you can view live data - look at the engine ECU value for coolant temperature, does it read c. 10 degrees (ambient temp.) at cold start, and does it climb steadily and consistently when the engine is started?
Then look at injector live data, does injector 2 have wildly differing values than the other 3? If so, and as you say the injectors have been tested, suspect problems with the wiring to injector 2.
The NOx sensor values of zero puzzle me too, but I don't know what engine protection strategies Mercedes would employ to handle implausible NOx data. However, live data for DPF pressures and fill levels will help hugely here - my guess is the car may think the DPF is full, and is always trying to re-gen, thus overfuelling.
Just my thoughts.
Martin.