Jon, When I worked for a dealer w/a service dept. they had an engine take salt from the exhaust. Merc said to put in new oil and filter, run it for a few minutes, drain and repeat five or six times. This doesnt solve he problem of wher the water is coming from but that is what I heard you should do afterwords. Good luck. Whos boat? are you going to be in CA for the run next week?