You mentioned you replaced the distributor sensor. Whose did you buy and install ?
Did you swap module and coil from other engine ?
Did you ever do a cold and hot compression test on the ill motor ?
Do a vacuum reading test on both motors to compare ?
Voltage at coil , especially when running poorly.

I found excessive play in the distributor shaft, somehow overlooked it when replacing the distributor gears. Will get that fixed, and I´ll let you know the results :)

have you ever tried swapping out the thunderbolt ignition modules, see if that follows the problem

I´m going at it step by step. I will swap the ignition modules next, and then the carbs (again) just to be sure, I manage to do one thing per visit to the marina and I´m stretching my daily available time already, but I will get to that next. So, sorry for the slow progress and thanks for the help :). But I have some new strangeness going on now.

Plot thickens.

After fixing the distributor bushings, now the engine runs noticeably more richer than before, constantly with light blue smoke, at all revs. The soot film on water is gone, now I have blue smoke.
I tried to set the timing after the distributor fix (put it in the same place, marked etc) and saw that the timing mark is way off on the balancer. I have set it previously, I do not remember exactly how-what but I was satisfied with it last time so I presume it was good then. Right now the timing where the engine doesn´t die is about 30-40 degrees off (I can tell when dialling it about to 50 degrees instead of 8). And when I try to turn the distributor to the mark, it just dies. I checked from the other engine that the strobe works fine. I also noticed that the flywheel on that engine is physically larger than the one on the good engine.
What mystifies me the most is - is it even possible for the timing module/sensor to create this situation at all, where it runs badly on all revs when off mark (but runs), and on the mark does not run at all. I tried patiently to tune it by hearing but it does not get better on any position, so from bad to worse only.

Ok, switched the carbs - did not get better. Switched the modules - did not get better. They both work properly on the other engine. So does the sensor, distributor and coil. The wires are new and I have now run out of engine-external possibilites.
The timing issue where it died after coming down from 2500+ revs turned out to be a badly adjusted throttle cable. The idle was originally set when moving the cable back and forth close to idle. When throttling more, all the slack at the attachments at the carb added up and when throttling down from high revs the slack accumulated and the revs dropped too low so it died. I have never read or heard about this kind of issue so maybe it helps someone else.

But the bottom line is, it is impossible to get it to run without bluish smoke and fuel in water. Since the strobe shows timing mark off about 30 degrees I had to try to find the correct spot bit by bit but it never stopped smoking. Took a lot of time to check different positions, one of them had to be the right one. Also smoke is more intense when starting when hot. I have ordered a new harmonic balancer, it may have slipped, and I´m pulling the engine again. There has to be something wrong internally.
When I finally solve this I will update the thread. :D

The only thing I cannot figure out why it started to smoke more/run richer AFTER I fixed the distributor bushings side-by-side play.

Is the engine still in the boat and running right now ?

Yeah, will take the boat out tomorrow and the engine probably in a few weeks.
Its time to winterise here anyway, so I would have taken the boat out in two weeks anyway.

You have an idea I havent tried yet? If so, then tomorrow morning would be the last time to test it out.

is the smoking motor the fresh rebuild on it?

I do but its too long to post on my phone and i am away from my laptop till later. You dont have to run the boat in the water to do it so you can do it before you winterize. I'll post it later.

I am sort of suspecting an intake manifold vacuum leak from the bottom of the intake. I dont know what type of breather/ pcv setup you have but basically what you need to do is remove all of the tubes going to the valve covers and block all of the valve cover holes except one. If you have a pcv valve make sure you block its hose off somehow so that it wont be a vacuum leak.

Once you have everything blocked off except one hole in a valve cover, start the engine and let it run. The first and easiest thing to try is take a small piece of paper and hold it over the hole in the valve cover. It should not get sucked against the valve cover. There should be some pressure coming out of the valve cover hole. If the paper does get drawn down against the valve cover then there is a good chance the intake gasket is not sealing along its lower edge where you cant see it. That will suck oil from the lifter valley area and make the smoke. It will also be a vacuum leak that might cause your running issues.

If you cant tell for sure if there is a vacuum or pressure at the valve cover hole, spray a 3 or 4 second shot of carburetor cleaner in the hole. If the idle changes a few second later then you definitely have an intake leak.

This test might help prevent having to pull the engine :)

Hope this helps,