1986 - 2001 overheating

I just recently purchased an 86 2001. When i picked it up we ran it on the hose for about 10 min with no issues however when i put it in the lake after about 3-5 min of operation i noticed the center warning light came on and then the top light come on as well. As i began to check the gauges i saw the temp creaping up to about 200 and either steam or smoke coming out the stern so i killed the engine. What could be the cause of the overheating? I thought it could be the impeller but ran it on the hose just fine and what are the three warning lights in order of their reference. Thanks for your help

Or you could have an air leak,either at the strainer or one of the hoses, but check to see if the pump is on right first. Here is a diagram Hollywood posted on another thread- looking at front of engine,yours should be the RH version