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Wondered if bondo could retain water and later come through paint? Thanks

Nope. Just make sure its dry from wet sanding before priming.

Bondo leaves a rough texture. You have to sand it smooth, coat it, sand until the color doesn't have orange peal or pits in it. Do a test coat in that area before moving on.
Steve

No reason to wet sand Bondo. It does take a long time to dry if it gets wet, I think the water soaks in. I used to use metal conditioner on tanks before first coats of epoxy primer......ran into blistering a couple years later. Switched to self -etching primer to eliminated getting Bondo wet.