Try this, too.
I had a similar problem, with very little water and overheating. I have the 5411 diesel with raw water cooling. I ended up removing the thermostat housing from the exhaust manifold and discovered that the inlet to the thermostat housing was clogged with gunk. I cleaned it and after re-mounting it, backflushed with freshwater from a hose until it ran clear out the inlet hose. By the way, with the 5411 diesel (if that's what you have) you never do get a continuous full flow through the exhaust. With a cold engine you just get a trickle. After exiting the engine, much of the hot water is diverted to the inlet from the thru-hull, mixing with and pre-heating the raw water. When the thermostat heats up it actually closes instead of opens, closing off this path and allowing the water to flow through to the exhaust. If your seawater is very cold, this is not going to happen until the engine gets pretty well warmed up. It's also possible that your thermostat is faulty and stuck in the open position. If so, you would have little or no water in the exhaust since it would all be recirculating to mix with the inlet water. I',m not sure if this system is on other engines than the 5411, but it's somewhat disconcerting since well-meaning observers are always pointing out the lack of a strong water flow from the exhaust. This system also generates steam from the exhaust which is sometimes mistaken for white smoke.
