Beezil,
the picture toz attached does show water at the level of the stock airbox intake, it is possable that he could gulp water at that point. Yes, your distributor will get wet 1st, yes that may stop the engine before it ingests water. A proper speed in water will form a "bow wave" and keep water from the ign system, but, it is possable to get water behind the headlight and into the box if you are in the water long enough, Drummond Island comes to mind.
There are 2 ways to get your air intake away from water, raise the Jeep, or raise the intake. Allot cheaper to raise the intake, even if you never intend to travel deep water. I am sure you have entered creeks, streams, lakes...etc. where the entry angle dumps the front of the XJ under for a few feet, the chance for water getting sucked into a stock box at that point is very real. Your solution maybe a open element, but open elements do not appeal to everyone.
Rev