Jason,
what kind of power in what size boat? Does it have XR or XZ type gears? How did u fill the drive? You say you inspected it, did you tear it down or just peek inside? Where is the worst heat damage located, lower (fwd) gear and inner bearing? What is the running history, or should we say, how were you driving it prior to and at the time of failure. Give me a general run down on the 10min life of this thing..
If it were a heat/oil related problem, you may have had an air pocket somewhere..
I have rebuilt two SC Extremes, that had XZ gears in them and they held up fine. So they are not all junk. The insides are mostly Merc. If they are over powered or abused or assembled wrong, anything can break.
I am sorry to hear that you had a failure. I know what it is like to buy something and expect it to be "better" and it fails..

Tell us more about what you find inside.. that may help locate the problem..