20 hp 4 stroke not peeing water

[sublauxation]

I have a 2011 20 hp 4 stroke that isn't squirting water out but I can definitely feel air coming out the hole with it running. Does this sound like an impellar issue? We used a compressor to blow air from the top and at first it seemed plegged but afdid eventu

 

[sublauxation]

.....after about 20 seconds it started bubbling from the bottom pick up.

 

[sublauxation]

Took apart the lower and the impeller looks new. Would water pee out if the thermostat was still closed? It's my dad's motor so I have no past experience with it.