Glad you went there Kevin really knows his stuff....
Lookin' at your first batch of pix, I'd guess more so that the risers failed and dumped salt water right down the center exhaust passage, or maybe that block off plate/gasket could have leaked, but your manifolds being closed cooled were probably not the problem. However, seein' as how much rust there is in em now, you'll be replacing the whole mess. I'm hopin' you can do this job for the price of the machine shop work, new Fel Pro gaskets and a set of Barr manifolds and risers, that's a good outcome!
For my job, the engine repairs (re-man heads, new APR manifold and head bolts, gaskets) were about $800.
I also replaced the whole exhaust system, converting it over to the center riser Volvo style ($1200 including Barr manifolds/risers and V/P hoses and exhaust pipes). Also added a new circulating pump.
The fact that your engine was always closed cooled has to help here....