I think any wood that's been in a lake long enough to sink on it's own is likely safe to use. I'd boil it if it was not too big, or soak in either salt water or bleach and water for a few weeks, which will kill anything that might be living in or on it, then give a it scrub to take off any loose splinters or crud that's on there. Rinse well, use double dechlorinator for a final rinse if bleach was used, just to be safe.
The main reason green woods are not good is the sap, which can contain any number of compounds that might be harmful in the confined space of tank. In open water they get diluted so much, few issues arise for wild fish. Pines and other evergreens have some other compounds in their sap, resins and such, which can be toxic, but they get weathered out with time and also with drowning for long periods. If you don't see any lumps of dried sap sticking to it, and it's sinking by itself, I would think it is ok to use it given the soaking or cooking first to get rid of any hitchhikers,
Even the bug spray would likely be removed by prolonged soaking. Check the label on the can to see what's in it. If it was pyrethin based, that degrades within days at most, especially in water. If it was organophosphates, those persist and I would not risk it in that case. If it was something else, look up the chemical to see what it says about it's longevity in the environment. Even the stuff they spray to kill roaches in my apartment building lose their activity after a few months, and they tell you specifically not to wash it off for the first week or so.. because you ruin it's ability to work if you wash it off.
So soaking, with several changes of water, is likely to remove most of the toxins that might be present, though you might want to err on the side of longer than shorter soaking if it got sprayed with bug killer.
