I had one of my 500 hps overheat this evening coming back from the beach. I assumed I may have sucked it full of sand but it was raining by the time I got to the ramps so I loaded up and went home. I back flushed the lines and they were clean, no sand. The seawater pumps are new with only about 40 minutes total running time

My question is...with a flush muff on the outdrive and water on, and the outlet hose off of the seawater pump, shouldn't you be able to hit the starter and water spew out. The outlet at the seawater pump doesn't have a drip with the water pushing up against it, so does that mean the impeller blades are ok? Is there a key on that seawater shaft that could have slipped? The belt is tight.

I boiled the thermostat and it only opened slightly on the first boil and more after the second and third cycle of boiling and cooling. It could have been a grain of sand in the thermostat.

Here's how I check the raw water pump:
Take off the belt and turn the pulley clockwise with your hand.
If you feel resistance, chances are the impeller is okay.
If it spins freely, you have found the problem.

First it depends how tightly sealed the muffs are. The ones I have don't seal well and rely more on the pump sucking the water up rather than pressure from the hose.
Second, you may have a blockage somewhere between the lower unit and the raw water pump. Reading all the "overheating" and "running hot" threads recently, the water passage in the transom assembly has to be checked.
Pull off the "inlet" hose on the raw water pump and shoot water through there. It should drain out the lower unit.
I have fresh water flush tees just inside my transom. With enough pressure from the garden hose, I can push water all the way up and out the risers...