Yea, the boat is equipped with a fresh water system, however I don't use it and it has absolutley no water in it.
Update: We took the boat out again and when we backed it in the water I had a close eye down there to see if it took on water. It did fairly quickly and with the motor not running. (I actually ran the water hose to the boat this morning and everything stayed dry so I'm ruling out all hose related leaks for now.) Its hard to see down under the motor, but it really looked like it was leaking through the garboard plug. So I went and purchased a new garboard plug today and when I took off the original it had practically no seal at all left. I took the three screws loose and it was already coming loose from the boat. With a slight tug it came right off! The entire mating surface was wet so I know for sure water was getting through. SOOOOOO, If I haven't found THE problem, I'm sure I at least found A problem. The garboard plug that I purchased is actually too small, so I cleaned up the original real good and I'm going to get some 3m 5200 and pop it back in. Also, the boat seemed to only take on water at idle speeds or sitting still.
On a side note, I really liked the new garboard plug. It has a ball in it that allows water to exit the boat, but not enter the boat so if I was ever to forget to put the drain plug in, it would buy me some more time! Too bad it was too small...
Thanks for the help guys and wish me luck, I hope my leak is gone! How can I let these kids down? (This was from today's ride!)