OK, so there was at least some water flow when you checked it out.   I would think that a freshly rebuilt powerhead might run a bit hotter as well, what fuel/oil mix were you using?   Had you just decelerated from WOT back to idle when you checked it, or had you been idling along?  All water pump parts were new and OEM, you might want to compare them to the old parts, just to make sure there is no manufacturing defects.  I would run a tap down through those water pump threads in the gearcase just to make sure the screws weren’t bottoming prematurely for some reason.  How about the impeller plate mating surface on the gearcase….Clean, flat, no erosion/corrosion issues?  I would use a little to the OMC type M/847 sealer between the SS impeller plate and the gearcase housing as well.  But don’t put any sealer between the impeller housing and SS impeller plate, this will ooze out into the impeller area and may hinder pump performance.  Don’t forget to check that little air bleed hole in the top of the impeller housing as well.  How about the water tube, does it appear to be bent due to previous mis-installations?   You may want to gently insert the impeller housing and grommet up and into the water tube to make sure it does not have to be pushed up too far into the exhaust housing to fit/seal properly on the grommet.  The impeller housing should be about flush with the gearcase mating surface on the exhaust housing when sufficiently connected/sealed to the water tube.

From what you said, it really doesn’t seem like the actual engine temp was high when you noticed the hot water/steam discharge.  It is possible that if you had let the engine continue to idle for a moment or two the discharge temp would have come down and the steam would have disappeared.  Do you remember trying this, or did you just look and check immediately after coming down off a high throttle setting?

The only other variable here is the exhaust housing, and other possible bleed offs to cool it.  I am not that familiar with this exhaust housing, so don’t know, just wish I had another exhaust housing to rip apart and inspect.

OK…  Well I’m wondering if engines made after this period all had this cooling modification….  Are you sure there is not hole in that new spot already, perhaps just plugged with crud?

I gotta say though, that location really scares me though….Mighty close to those lower exhaust ports.  Exhaust tuning is a tricky thing, one I surely don’t have a strong grasp on.  I would just worry about that new hole pulling water back into those exhaust ports.

So, I’m gonna be conservative here..  If that hole isn’t there already, I don’t think I would add it…

Unfortunately, we may be searching for an issue that just isn’t there buddy…  Although I’m not in favor of that modification you posted, I’m not against added some relief somewhere in that exhaust hsg to help cool it down a bit.  Just wish I had one laying around here I could look at..

AHA, now you are getting someplace.  That is freeze damage, caused by expansion of ice.  I’ll wager there is more cracking somewhere, letting air or exhaust leak into the intake side of the pump.   Those are great water pumps, but lousy air pumps.

Mmmm……As I suggested back on July 23.