A B737-300 FORWARD LAVATORY WASTE TANK DUMP CABLE WAS FOUND BROKEN AND THE ITEM WAS NOT DEFERRED PER THE MEL BUT MADE A LOGBOOK 'NOTE.' WITH NO DEFERRED ITEM DOWN- LINE STATIONS WERE NOT MADE AWARE OF THE NECESSITY FOR MANUALLY DUMPING THE TANK BEFORE SVCING AND THIS RESULTED IN AN OVER-SERVICED TANK THAT SPILLED OVER ON ROTATION INCURRING EQUIP DAMAGE.

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THE FLC OF A B737-300 RPTED THAT THEIR FORWARD LAVATORY WAS OVER-SVCED AND REQUESTED MAINT TO INVESTIGATE THE SIT. I WAS DISPATCHED TO THE GATE AND DETERMINED AFTER REMOVING THE TOILET SHROUD THAT THE DUMP CABLE WAS BROKEN WHERE IT ATTACHED TO THE PRIMARY DUMP VALVE. I PROCEEDED TO MANUALLY OPEN THE VALVE AND EMPTY THE CONTENTS OF THE LAVATORY HOLDING TANK. IN COORD WITH OUR COMPANY'S MAINT CTL; I ENTERED A DISCREPANCY IN THE ACFT LOGBOOK AS A MAINT NOTE SO THAT THE LAVATORY COULD STILL BE USED BUT HAD TO BE MANUALLY DUMPED. THIS IS THE POLICY OF OUR COMPANY IN ORDER TO REDUCE PAX INCONVENIENCE RATHER THAN PLACING THE LAVATORY INOP UNDER A MEL. I AFFIXED A TEMPORARY PLACARD (TAPE) WITH INFO THAT THE LAVATORY HAD TO BE MANUALLY DUMPED. THE ACFT WAS SUPPOSED TO TERMINATE THAT NIGHT AT A MAINT BASE WHERE THE CABLE WOULD BE REPLACED. THE ACFT WAS LATER REROUTED AND TERMINATED IN A NON-MAINT BASE. 3 DAYS LATER AFTER TKOF; THE LAVATORY OVERFLOWED AND THE FLUID SEEPED TO APPROX THE 3RD ROW OF SEATS. THE FLUID ALSO PENETRATED THROUGH THE FLOOR AND SEEPED INTO THE MAIN E&E COMPARTMENT INTO THE E-1 RACK. AT THAT POINT; THE CAPT LOST PRIMARY AIRSPD; ALT AND GND PROX INFO. AFTER LNDG; MAINT DETERMINED THAT THE FOLLOWING COMPONENTS HAD EVIDENCE OF BLUE WATER DAMAGE: #1+2 DAA; #1+2 ADC; #1 STALL MGMNT COMPUTER; #1+2 FCC AND #1 FMC. RAMP PERSONNEL WHO WERE UNAWARE THAT THE SYS WAS INOP AND THAT ALTERNATE PROCS SHOULD BE USED HAD SVCED THE LAVATORY AT THE DEP STATION. IN ADDITION; THE CAPT DID NOT REALIZE THAT THE SIGNIFICANCE OF THE MAINT NOTE SINCE ONLY MELS ARE LISTED ON HIS DISPATCH RELEASE. ALSO; THIS ACFT HAS 2 DUMP VALVES UNLIKE THE MAJORITY OF OUR B737'S WHICH ONLY HAVE ONE. GIVEN THE RIGHT SET OF CIRCUMSTANCES; THE LAVATORY MIGHT APPEAR TO DUMP PROPERLY SINCE THE SECONDARY VALVE WAS STILL OPERATING AND FLUID MIGHT HAVE BEEN TRAPPED IN THE DRAIN LINE FROM A PREVIOUS MANUAL DUMPING. THE PLACARD THAT I HAD AFFIXED TO THE PANEL WAS MISSING AFTER THE INCIDENT.