I too am trying that same thing. I bought a used chest freezer last week(that's a fun story about a long road trip), and have been looking at fluids for a while. I have spent the last 2 months looking into this pretty seriously. Don't use distilled water. Theoretically, it would be fine. In practice, you'll toast you components in no time flat.
Leave your HDD out of the freezer and fluid too. No matter how new or old it is, it was not meant to operate in those conditions. I wish I could find Balazs Bodosi's article on his oil cooled Power supply right now, but you can put those in the fluid/freezer. I will look for that page tomorrow, but look for it yourself in case I can't find it.
Transformer oil will degrade your components in a year or so, so for your project it might be fine. But if you intend to freeze it, it is meant to be used at higher temps, and will be very viscous at room temp or below. Mineral oil will be similar, but less viscous.
Syltherm is a good coolant and is a non-conductive silicon based oil. It looks good, but is expensive and hard to get a hold of in small quantities. If you are interested, let me know though. I posted a thread
a while back to see if I could find anyone to split a jug of it with me, no one but you responded. There are a few places that sell it in 5 gal. jugs.
Balazs Bodosi suggested brake fluid to me. DOT5 is silicone based and I think it would work, but it is pretty pricey too, $35-80 per gallon. It is what I have on the top of the list right now though. I will use more or less coolant depending on the price of what I use. He also suggested using a coating to put on the board to isolate the components from the coolant. His experience with dissolved plexiglass does not appear to be the answer, but it is a good idea if we could find an alternative.
I was also thinking alcohol since it is really cheap, dielectric and extremely fluid at low temps, but it is volatile and should be used with caution. Don't breathe the vapor from any alcohol for very long, all alcohols are toxic. I can't recommend alcohol, though it is an option.
I need this semester to end before I really finish this thing, but I am collecting pieces and working on what I can when I can. I have an old 486DX2 or a P200 that will test the system for a while. Let me know what you come up with and/or how it goes. Let me know if you have any other questions too, I might have come across something in my research.