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I think there are different types of embargo. Watford's was a Regulation 19 embargo - Duxbury: Football League rule changes will have no impact on Watford. This type of embargo DOES allow players to be signed, with the permission of the Football League. However, I believe other embargoes are...

Creaky, you are not understanding what drew is trying to tell you. Clubs have to submit their accounts by Dec 1st; any transfer embargo will be enforced from the following transfer window, ie Jan 1st, one month later. There is NOT a "two season window" to spend their way up the divisions.

You keep repeating this, but are you sure about that? I know that the transfer "embargo" that was applied to Watford allowed them to transfer in players with the League's permission, but what makes you think that the same rules will apply to the FFP penalty?