I've been helping a friend with his overheating 1977 OMC 235 (Ford 351 Windsor), 400 Stinger Electric Shift. The cooling system was completely flushed. All Flow Tests checked perfect. Thermostat was replaced and then temp tested (Perfect) and reinstalled. Both water pumps removed and inspected, though they were both new last summer. We tested for exhaust gas entering the cooling system. Negative. The manifolds and elbows have been rodded and acid cleaned. The engine is in perfect time and purrs like a kitten. The water inlet is clear and free of leaks. The exhaust passages are clear. The Temperature gauge and sending unit were checked.<br />Now the weird part: When starting all of this, we removed the thermostat to see if it would overheat without it. It stayed cool. This is why we decided to replace it. The new thermostat made no difference. This is why we temperature tested it. Both old and new thermostats tested good.<br />Second weird thing: While doing the flow testing we noticed exhaust gasses coming out of the exhaust manifold water inlet. Cleaning the manifolds and elbows made no difference. There are no leaks in the manifolds between the water and exhaust passages. This made me suspect a blckage in intermediate housing or the outdrive. Running the engine with outdrive removed relieved the exhaust gasses from exiting the manifold water inlets. This made us feel certain the blockage was not in the intermediate housing but rather in the outdrive. Complete disassembly of the outdrive showed no blockage.<br />Any Suggestions?