More than anything the problem was likely overfeeding and not enough bedding/lack of air more than wetness - they can handle quite wet although pooling liquids are bad.
So my suggestions: more bedding (something with more bulk like cardboard), a layer of cardboard on the bottom (it will absorb the liquids and let some pass through, reducing the likelihood that water pools), and feed less. And more bedding and more bedding.
Basically, if problems start: add bedding and stop feeding for a bit.
What bedding are you using?

If I build a worm bin using 2x8s in a square 4x4 ( approx. 10 cubic ft. Of volume), how many worms should I buy to occupy this size of worm bin?

If into the bin is going

so much food

and

so little bedding

that there is drainage

then consider adding more bedding and less food.

Consider it may be time to harvest. To dry out the material perhaps put it into a flat tray with holes in the bottom and store it on the top of the vermicompost bin with the cover off for a period of time. This will allow time for any worms to dive out of the drying material and for any eggs to hatch.

I think the structure of each vermi deposit has value. When they are melted into mud something of value is lost when the structure of each individual bit is mushed.

Perhaps the bottom of the bin should always have a layer of shredded cardboard?

armoured: I type or more accurately think slow and saw your answer upon posting mine. Our answers were nearly identical. I feel safe saying we gave the standard answer most of us on this board would give and ange2006 got a real good reply from you.

bobvisaa: Please forgive me. I a re-posting your question into its own post. You will get better organization to your replies and your specific question and will not have to separate then from the worm drainage question.

armoured: I type or more accurately think slow and saw your answer upon posting mine. Our answers were nearly identical. I feel safe saying we gave the standard answer most of us on this board would give and ange2006 got a real good reply from you.

Equinox: great minds, etc!

Armoured, equinoxequinox

I don't remember what I used for bedding - probably peat moss. It make sense to use cardboard instead. You're probably right about overfeeding. Especially in the summer, I have lots of watermelon rinds. But I did have a lot of worms. Another thing is, I almost never harvest the casting. Maybe I should do as you suggested. How often should I harvest castings?

Ange

Options are:

When you can not fit anymore food into the bin.

When you want some castings for your plants.

When you have some extra time and want to play with the worms.

When you want to divide the worms for a second bin.

When you really want to see what is going on in the bin from top to bottom.

When something just is not right and you want to inspect things.

When you want to know if your one pound of worms has grown to two pounds or shrunk to half a pound.

Ange, you're probably right that the issue was that the castings needed to be harvested. You said it's been going for three-four years, so yep, that is likely it.
Equinox gave good suggestions. I'd add two suggestions: first, harvest in either spring or fall for the garden. If you don't have a garden, just give the castings away or spread 'em on a lawn or whatever.
Second suggestion: if you're lazy and don't like the harvesting, start a second bin (could be a small one), move some worms over whenever you find them, let it sit for a while until there's very little unprocessed anything left, use what's left (will mostly be castings, anything not processed can go to the second bin), then move contents of the second bin back to the first and start over.
Since you've had it for three-four years they're pretty well established and should handle this fairly well.

A couple of months ago when I found the worm bin too wet, I took everything out and distribute them all over my garden. I'll start over after I pull my summer vege plants and retrieve the worms. I should've saved some and started a small bin then. Too late. I do enjoy playing with my worms. From now on I will harvest much sooner. Thanks for all your suggestions.

A nice advantage of an indoor worm bin is in the spring or late winter when the weather outside is bad yet the garden catalogs show nice pictures of gardens it is always nice at that time to harvest the bin and get ones hands into the "soil". The whole while harvesting one's mind is dreaming of the August garden. Magically it has no bugs or other issues because it is just a dream. That is why I vermicompost.

In my opinion there should be no drainage. Ive only been doing this since april but have never had any drainage. Your bin is too wet either from feeding too much and not enough bedding or both. Add some shredded newspaper or/and cardboard. Good luck.