You said..."You are mentioning different temps and you don't mention the sphagnum moss; but you had great success. Should I adjust to your temps? Now the eggs are at 85F with little sphagnum moss on top. Any thoughts?"...there's more than one way to incubate the eggs that works...so you have to decide for yourself which method to go with. The way I have done mine always worked for me so I never changed it. As for the temperature, I don't know what the upper limit is before damage results to the fetus...I can only say that I have never kept them as hot as 85F. Regarding moss...I tried covering eggs with moss a few times a long time ago but the eggs molded. They never did without the moss, so I never used it again. I have heard of people using moss successfully though.
During all the years I bred/kept them, I only had one baby born with a defect (cleft palate). I kept several of the females from a couple of the clutches and they grew up to be healthy, good-sized adults that also reproduced well.
I fed my waterdragons gutloaded insects and a wide variety of fruits, veggies and greens every week. I dusted with calcium often and with vitamin D3/calcium and vitamins/minerals twice a month because my dragons were always indoors.
You said..."Also, geez, not sure they will be fertile since, I guess the other one is a male, but I can see the large femorale pore on only one legg, and the crest is not much bigger than the female's one. Any suggestion?" I would incubate them anyway and keep on until you are sure they are infertile. The worst that can happen is that they are infertile and will go bad in a couple of weeks.
As for telling the males from the females, males have a slightly wider tail base, (the crest and pores you already mentioned) and they have a more pronounced jowl/cheek area. The female's head is a little more slender. Still not the easiest lizards to sex when you haven't had much experience at it!
(At least if you do have two females, you can look for a male and have a trio! Its better than ending up with two males!)
Hope this helps!