If you failed to open the walls when it was still wet but instead waited for it to dry, I would highly suspect mildew or mold spores within the wood. Both will feast on cellulose and can be present without any coloration changes.
You need to dry out the walls and basement with dehumidifiers, more than one, for at least 7 days, and have the temperature raised to assist moisture removal. Having a couple of high volume fans would also help.
The wood in the walls should be tested with a moisture meter. You can have a moisture removal/damage contractor come in to test the wood for moisture, you don't have to use them for any restorative work. They know what the threshold level is for the meter reading for your geographic area. Each area is different.
Treating wood to remove or prevent dry rot: dry it out and keep moisture from coming back. Using cement board will only help you not have to replace sheet rock if it floods again, it will do nothing to help you with the wood structural if that gets wet. The only way to really prevent dry rot is to remove all moisture within 48 hours of it getting wet. After that, no guarantees unless you take extra steps to treat the wood with something like Boric Acid, which kills mold & mildew spores. You do not have to remove wood that does not contain dry rot, but drying it out IMMEDIATELY after it gets wet is very important, or at least dry it out and treat it as soon as possible. Spores form within 48 hours of the wood or other material getting wet. But they have to have food, and the wood, paper in the sheetrock, and glue present in carpet is where they get their food.
I would remove all insulation that got wet and remove the sheet rock as far up as you can go until you do not see any water staining, then go another 6-12 inches to make sure. Where structural wood meets your mud sill will be a critical area to make sure it is 100% dry before you finish the wall. Otherwise expect dry rot later.