Thanks everyone for your input. Did a lot of testing over the past couple weeks, here are the results:
1. Did a clear hose test while on the plain - no air is being sucked in
2. Took both caps off of the heat exchanger and looked through tubes. I see no signs of corrosion of buildup, looks pristine.
3. Did multiple tests of flow rate, both in-situ and "bucket fill". For in-situ measurement I installed a simple (glass tube type) flow meter right before the heat exchanger. Double checked the flow meter readings with "bucket" measurements (used a 5 gallon bucket to improve the accuracy) - readings are consistent. So... drum roll ... at 3000rpm I see 18G/min in-situ flow. At 1000rpm I see 6.5 in-situ flow.
4. Did the vacuum and pressure tests per VP overheating diagnostics manual. First, I connected a 1and 1/4" tee to the incoming raw water line (right before the pump) and measured the vacuum. I see 2inHg @ 1000rpm and 8inHg @3000rpm. Did the same with a 1" tee in the outgoing line (right after the pump). I see 5-15psi @ 1000-3000rpm. According to VP manual, for my outdrive (DP-SM) I should see 2-19inHg vacuum @idle-3000rpm and 2-10psi respectively. So, looks like a blocked water passage downstream, right?
5. So, i did a radical (dangerous) test by diverting the flow straight into a bucket (bypassing the heat exchanger and exhaust risers for a short period of time) - I am getting 7.5G/m at 1000rpm (no head pressure, obviously). Still too low!!!
6. Bypassed the intake (pulled the intake hose off of the steering oil cooler and extended it with another 1" ID to suck raw water directly from overboard) - no change in flow rate!!!
I am pulling my hair at this point! WTF can it be? Again, this is a brand new (VP) pump.
the jabsco pump on a VP flows 24 GPM at about 3000 RPM in-situ.
at about 1000 RPM, you should be about 15 GPM flowing into a bucket (~ 1psi back-pressure) if I remember the pump curve.
...
Scott, this is a jabsco pump you are referencing. Is it one of their "high flow" pumps? Is it possible that the VP pump is rated lower? (sorry, reaching for straws here). Could you please point me to that jabsco pump (exact model, etc)?
Is it possible that the problem sits with my engine tune, i.e. exhaust being too hot or something? (again, reaching for straws here)