I saw exactly the behaviour Mithrandir describes last night on an S-18 class, coincidentally- engines repaired (both diesels and electric motors), yet no propulsion at all and sank like a stone when diving to use the electrics.
While hull damage may well make diving impossible until repaired, it should be possible to motor away on the surface if the machinery is intact/repaired.
Whether engines actually could be repaired or not would depend on damage level- IRL, "Damaged" could mean replacing a cylinder head, liner, piston or bearing shells for instance. "Destroyed" could mean a broken crankshaft, piece blown from the cylinder block casting or some other terminal and irreparable damage.
Getting back to base might well prove impossible eventually if you are stuck in the middle of hostile territory and can't submerge though........ but at least you could try!
And yes, I'd very much like to test this fix!
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