Your '85 boat probably has a Universal M25 diesel rated at 21 hp.
The raw water pump may be an Oberdorfer pump. Some folks report having a Sherwood brand pump, but I am not sure if yours might have one. Is there a little metal ID tag on the front of the cover, held on by one of the four cover plate screws?
As far as what "could" be wrong there are several places to trouble shoot. Start with the pump impeller. If any vanes are broken off, the piece(s) may be lodged in the metal elbow from the pump or in the heat exchanger.
Are the hoses, fresh and coolant, original? If so it's past time to re-hose the engine. Not very expensive by boating standards, but tedious. Been there/done that/did not get a T shirt.
While boat is out for bottom work, inspect the engine water intake -- if it has a "screen" remove it. They are problematic on their best days.
Your boat may have a strainer, or may not. Good to add one if there is not one there already. Plastic not so good for this, no matter how nice the picture looks on the ad. Go with a bronze base Groco unit.
http://www.groco.net/SVC-MAN-07/Sec5/PDF/ARG.pdf
Loren