water in oil

just bought a boat and big problems after 1st try....
Need help with a 92 5.7 mercruiser with bravo-2 drive. ran the motor in the water after 5 minutes the engine overheat and alarm sounding. shutt off the motor and get towed back to dock. buddy said the thermostat should be problem. we yanked it off and it was full of cr*p and completely blocked with no sign of water below the housing.
replaced the thermostat and try to start to motor, dead - hydro lock. pulled out the motor and sent it to a marine merc auth rebuilder. they tore it appart and found the motor full with water, in cylinders and in the base. they found no real cause, no cracked heads or block. no blown gasket and exhaust manifolds pressure tested and no cracks. they are rebuilding it now but i am worried about dropping it back in the boat with the same problem after spending 5k on the rebuild....

Thanks

Re: water in oil

Are you going to put a new engine back into your boat and use the old manifolds and risers?

Let me rephrase that. DON'T put the engine back in with the old manifolds and risers.

Also, replace the shutters in the y-pipe (if you have thru-prop exhaust)

Look very carefully at the boat and see if there's some way that water can get into the carb when it sits in the rain.