1969 Chrysler 55hp cooling issues

[King of the Sea]

I have a 1969 55hp Sea King (Chrysler) that I have put a new impeller and housing in. I run the engine in a garbage can full of water, I have taken the thermostat out and have no water present at the plug close the thermostat when running the engine. I have put Hi-Temp RTV on my water tube to make sure I have no exhaust mixing with the water in the lower unit. The last thing I have done is taking the exhaust cover off and checked for cracks and plugged passageways. I started the engine without the cover and had a whole bunch of water coming from the top of the block where it would enter the cover. My engine runs really smooth and strong to make it hard to believe that I have a bad head gasket or cracked block. Any ideas anybody? This is my first boat motor so I have just basically taught myself everything to this point.