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Re: Blown headgaskets ? or not
Do a compression check on the motor. You can get a compression tester at Autozone or any other car parts place for $30 or so.
To do the test, remove the coil wire (so the motor doesn't start), then, one at a time, remove the plugs, insert the tester hose, and crank it until the compression goes up as far as it is going to (3 or 4 strokes). If you have uniform (within 10 or 20%) compression, it is not a head gasket. If you have 2 adjacent cylinders with low pressure, you almost for sure have a blown gasket. It is possible to have a blown gasket that affects only one cylinder, though.
If you have good compression, I'd bet that it is the gasket between your exhaust manifold and the riser. This happened to me last summer. The motor would hydrolock when I tried starting, but would run decent when I pulled it out of the water, but like you said, with excessive steam. I had water in the back two cylinders on the port side, and also the #3 cylinder on the other side because of the cross over in the intake manifold. It was worst when I let it sit in the water, because the cooling system would stay pressurized, and the water would just leak until the pressure dropped.
The root cause was because I put on a new manifold to replace a cracked one, and used new gaskets, but I re-used the steel block-off plate. (My friend, a Merc Certified mechanic approved, for the record) Bad move. New gaskets and a new $9 plate later, and the problem was fixed!
Good Luck!
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