My DD needed suctioning and oxygen at birth (apgars were 9, 7, 10 - she had inhaled and swallowed a little mec and her first breaths sucked it further down i think) and the midwives used no mask with the oxygen - they had one tank and theoretically 2 masks, but the infant one was a bulb and bag (to squeeze air in, not just deliver oxygen to the area) so they just held the tube under her nose (i don't know why your DD's paramedics didn't just do this - it's fairly standard if you have a tank and a tube but not the right size mask when a patient needs a bit of extra help with oxygen), in front of her mouth and she pinked up fine - they suctioned her with a bulb syringe and when they saw her colour begin to pick up again they put her on my belly and had me hold the tube near her face. She looked around for a while, my 2nd stage was written as 5mins, though i was trying not to push for a good while before they started counting, but i think she was just a bit stunned by the suddenness of her birth (i was!), but she got used to being out fairly fast and was having a feed 30mins later.
I don't know what would have caused a gasp reflex but MOST natural birth movies i've seen have someone touching the baby before it's born - perhaps that's why my DD inhaled mec, because i was holding the crown of her head as it oozed out, but no-one suggested such to me! Before my labour several of my midwives suggested i would WANT to hold her head to help protect myself from tears! I've also read ocean waterbirth stories - honestly i think the wet lungs was probably "one of those things" and not at all anything you or your DH did or didn't do. I'm sorry it tainted your HB experience, and i'm glad your LO is home with you now.