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Don't have any experience with the older PSD',s, and I rack miles up so fast on the 6.0L in the '06 that I change the filters every 3 months so I haven't had to drain it once yet, but whenever I drained the separator on my motor coach (semi class motor), I was always able to tell when the stream changed from water to fuel. Then I closed the petcock.
I have a 2003 7.3L and I also just drain mine until it stops, maybe 10-15 seconds or so. If yours is continuous I'm sure that after 10 seconds or so you'd be down to just fuel (your fuel bowl is probably around, if not, the same size) and you could shut the petcock.
It depends on how you take care of it. In Lubbock in the winter it get's kinda humid sometimes, so if your tank is low, there can easily be lots of condensation in the tank, which means you need to drain it more often. In the winter, I keep the tank at least half full to make life easier on the fuel pump/filter/seperator ect. Just put in 40 bucks every Monday and life goes great.