It is normal for the Water In Fuel light to come on for about up to 8 seconds when the ignition in turned to the on position, this is an indication that the system is working properly.
If water is present in the fuel, the light will come back on after it goes off at start up and stay on. Diesel Fuel does condensate when let sit for a while, but usually, water gets into the fuel tank after re-fueling..with the light on, it means you have around 2 1/2 gallons of water at the bottom of your tank. Its a very wise idea to Purge the water from the tank as soon as possible..water will RUST the injection pump and injectors, plus, a possibility to blow head gaskets when the water is sprayed and compressed in that hot cylinder
If the Water In Fuel light comes on when you step on the brakes, You dont quite have alot of water but there is some present in the tank and should be Purged within a few days...Water is HEAVIER than Diesel Fuel, and sinks to the bottom of the tank...thats why I say, Try not to let the tank get too empty, cause that water will shut that engine off very quick...if your lucky..all it will do is shut the engine off, rather than Blowing Head Gaskets, Bending Rods, etc...