Engine Overheating

You should always have water out the aft even if the T stat is closed. 

You should be feeling some suction at the end of your clear vinyl tube.

To me, it sounds like you may be sucking air in on the suction side of the pump. Check the hoses and connections. 

[1] simple check for blockage: run water backward through the suction section.

[2] check hose connections, or cracks/leaks.

[3] then try again, check at higher RPM (and lower RMP); if this makes a difference continue to look for air leaks.

Not to start a debate... but in all the time I've owned this boat (since 88), I have always observed that water does not discharge in the exhaust until engine warms up. before that, pump is not sucking water; no water in and no water out. my understanding is that water was just circulating until the thermostat opens. had never thought through how the water circulation is actually working but... that is what I have noticed.   

Anyway, will try again this weekend...

* Very easy to determine if pump is working correctly.  As soon as you start the engine (whether with a hose or in the water), put your hand on the backside of the pump housing.  If it is pumping water, it will be cool or cold to the touch.  If it's not pulling water, it will get hot VERY quickly (rubber on metal) and if hot enough it is starting to destroy the impeller.  This is a very good test when you first replace the impeller and put it in the water since it now has to suck from the hull all the way to the pump.  It should never be warm when running (except for a few seconds (5 seconds or so)) when it is first pulling in water through empty or near empty hoses/strainer.

* If you plumb a T with a garden hose fitting to your inlet line, the engine will take what it needs, and the rest flows out the hull fitting.  This doesn't check suction, but it does get water to the intake side of the pump without potentially damaging the pump by high water pressure (my outside faucets are around 70-80PSI).  As an added benefit, whenever I use a hose, it automatically cleans out my raw water strainer (which is between the hull and the T).  :)

Ignore the copper tube in the tranny filler; just pumped out fluid for a change.

Note that my strainer is on its side; it auto drains every time I pull the boat out, so there is never much in it.  But when I launch and start the engine, the pump has to fill up the hose from the hull to past the T (filling the strainer) since all of that drained when the boat was pulled out of the water.

One comment on how long it takes for water to come out of the exhaust when running it out of the water.  Due to quagga/zebra mussel inspections that we have to periodically get, the boat has to be 'dry'.  When I know I need an inspection, I stop on our rather steep ramp when pulling out and let water drain out of the exhaust--sometimes even gunning it as we come out to blow water our (there's a lot of water in it).  I have done that in preparation for an inspection, and then later after inspection later hooked up a hose to run it at the house for some reason, and it can take 1-2 minutes at idle sometimes before it all fills up.  So when I start it in the driveway, I always put my hand on the pump housing.  As long as it is cool, I know everything aft of the pump is just filling up.

(and no, it's impossible for these to be dry on the inside; if I was a mussel inspector, I could fail everyone if I wanted to....  ;)  That said, they know all of us from the ski club and most of us launch exclusively at our site, our boats and bilges are clean and dry, etc.  So rarely does anyone fail inspection (but I digress)..