I understand now, thank you gentlemen, I will update with results......

I got a chance to speak with my engine builder, showed him the plugs and we came to the same general conclusion, could be a number of things. He suggested before I do anything, mist the cylinders with storage seal (just to get rid of any surface rust if present) and do a compression test, if all holes are equal then the likely suspect was either an open exhaust valve during storage (probably not the case with the obvious heat on the plug) most likely when I was having low oil/water temps and lots of condensation in the engine and during a lay-up #5 exhaust valve was open allowing moisture into the cylinder, next time the boat was fired it "cooked" the rust to the plug, sort of made sense to me.

Compression test was:

1 = 150lbs
2 = 150lbs
3 = 152lbs
4 = 152lbs
5 = 150 lbs (This was the bad plug)
6 = 148lbs
7 = 148lbs
8 = 150lbs

All I can say is I think I dodged a bullet, now to go buy a lottery ticket....thanks for the input.

jeremy,,buy yourself the proper oil cooler with a thermostat in it..pull the valve covers and retorque the heads,,dod you notice any whitr spots in the exhaust runners when you had the risers off?

I agree. I wouldnt keep restricting water with restrictor plates. Sometimes, doing this, you will build ALOT of water psi, which can lead to intake gasket leaks, and even worse, head gasket leaks.

Get rid of the water restriction. Let the blocks and heads stay cold and get plenty of water. This is important especially if you are running the stock cast iron heads and a supercharger. Install a oil thermostat, to help get oil temp up to burn off condensation, and get oil to proper operating temp.

i agree 100 percent

I have one for sale in the spam section made from Hardin marine works great

I also agree 100%. Thermostats can also compensate for when you need MORE cooling. As he runs this "new" engine more and more he is bound to be harder on it. 90 degree day, someone starts a race, blower running hard, might get hotter than he wants with a restrictor

All good points, I installed a crossover system due to the Procharger mount, could not keep the recirculating pump. With no thermostat I found water temps never went much above 100* when running, we boat in VERY cold water. This led to low oil temps and hence, condensation in the oil.

I installed a water pressure relief valve which helped a little and then installed a thermostat housing restrictor plate, again helped a little, I then bypassed the oil cooler, again this helped a little more, although all this and it still runs cold.............

I agree, I have to bring oil temps up, so will look at oil thermostat, just wondering what can be done to bring water temps up or is it even needed? Can/should a block run at 100* or so...???

No white spots at all, I agree about the oil thermostat, just not sure what to do about water temps...?

Forgot to ask, are you carbed or EFI??? If your carbed, no problem running cold water temps. If your EFI, if you dont get up to a certain water temp, the ecu may stay in open loop. That will cause a rich condition, IF thats how things were programmed.