Re: 5.7 Mercruiser Hydrolocking
It is not possible that there is "no" water in the oil. It will leak past the rings anytime there's water over the piston, especially if you try to crank it.
There are 3 possible sources for the water. (1) exhaust system, via backwash or leaking gaskets, (2) head gasket or cracked castings, i.e., head or block, or (3), the sneaky one, via the intake manifold gasket seal. I once bought a Cobalt 19BR for real cheap from a dealer with a diagnosed blown head gasket/water in the cylinder. It turned out to be a leaking intake mani gasket, a $25 fix.
Identify for me again which cylinders show water?