Damn, no takers.....................

I would find a way to pressure test the cooling system. Looks to me like you may have a bad head gasket.

Just based on the color of the oil or also the water inside the oil fill cap?

A little moisture on the inside of the rocker cover/cap is relatively normal, just condensation. However I would be concerned with the pressurized crankcase and excessive "bad smelling white smoke", also the oil does look water contaminated, by the photograph.

I had a bad gasket/leak between combustion chamber and cooling system. I would compression test it, but it may not show at low RPM either. I think a few drops of water under the oil cap when cold is normal. Engines run hot enough to evaporate it then.
My one engine (ironically the running one) oil came out like a milkshake 2 years ago. I have a video of doing a cooling system test as well, where you can see air going into the cooling system at idle, indicating the leak between the combustion chamber and cooling system... it's a trick I was taught on another forum to trace cooling issues, by replacing sections of the OEM hose with clear hose. You can see the water from the raw water impeller has zero air in it. Then water leaving the block has air in it. Not ideal ;)

I replaced both of my engines 2 winters ago. Gained exactly 0 mph over the engines that both failed compression on multiple cylinders. and one was an intermittent no start for 2 years, the other was milkshaked.

Water has to flow thru the drive to cool it specially a b3 with that LH rotaion first prop, can't believe no one mentioned that.
so you need to remove the hose from the bellhousing to the transom assembly and block off where the water neck is, or run a hose overboard from the water neck to let water flow thru the drive to cool it.

Pictures, Year, make, model, engine and engine serial number

I already did all that stuff and also put on a drive shower. The Bravo 3 drive is working fine.

Awesome video!

Just curious, when you were running the engine before you knew about the leak, what kind of symptoms was the engine having? Overheating, milky oil, or just running rough? Was it overheating quickly within a couple of mins or was it taking a long time of running before it started overheating?

I don't want to detract from this thread, so: https://www.offshoreonly.com/forums/...ml#post4788481

Update: I removed 1 quart of oil from the system and then ran the engine again and everything worked fine. No white smoke, no burning smell, no overheating.

I checked the temps on the engine with my IR temp gun and the thermometer housing never got hotter than 147. The risers got up to 165 but I noticed that the starboard riser is always warmer than the port, anywhere from 5 to 20 degrees warmer.

Also, I noticed that the riser temp dropped dramatically at higher speeds/RPMs, decreasing all the way down to 115 at 4000 RPM.

Is there an issue with one riser consistently hotter than the other one?