<< At least one claims to have recovered data that was completely overwritten 9 (nine) times. >>
This company is full of sh!t, because changing the file format will change your curent block size (if I remember correctly diff hdd block format could be some where between 4k~1024k), and combine with a new writen info on the hdd it is imposible to know which format it was from. This method is even better than low level format, because your info and format is scrambled.
<< Minor fire or flood damage isn't too much of a problem for them either. One claims to have recovered a flood damaged hard drive that was shipped to them in a bucket of water (to prevent further damage by drying). >>
Head to disk distance is about 10 micron, and it will distroy the head if there were any partical atach it self on the surface(dust partical = 200 micron, human hair = 100 micron). If water make it in to the plater chamber then the hdd is toast, because of oxidation.
It is a common practice to recover electronic equipment by leaving it in a bucket of fresh water to prevent it from getting more dust and slow down the oxidation process (I have recovered camera & lens after it droped into a river). The moving part is what you woried about, because it will ceases due to dust, or oxidation. Most of the recovery is done by spraying the water off with can air, and then let it sit to dry for 24 hours. Sometime the recovery goes as far as dusting the electronic part with some kind of gas (such as lighter fluid) to make sure all water is off the part.