I have had a problem recently of my starboard motor surging at around 3200 rpms. This only happens under load (when I am running the boat).The boat will refuse to go past 3200-3500rpms. When the boat is in neutral it revs to 6200 rpms without a hiccup.
The engine in a 350 small block with mercury racing 700cfm carb.
So far I have checked distributor, replaced coil, rebuilt carb, checked fuel pressure from fuel pump..all this to no avail.

Any help appreciated as I running out of possibilities.

Sounds like a mixture problem to me. It's proably running fat or the engine would be backfiring.

Does your carb have the inline filter near the fitting from the fuesl line to the carb? I had an old donzi that did what you describe and my filters were plugged.

could be air entering your fuel line or begining form of vapor lock

Ttt

Swap Carbs between motors & see if problem moves to other motor.

I had a similar problem last year. Turned out my anti-siphon valve in the tank was bad. Hook up a portable tank to the fuel pump inlet. If problem goes away, that's probably the culprit.