I had a similar issue after installing a new impeller in my 496 sea pump with about 300 hours on it. What happens is the well documented problem of the impeller wearing grooves in the body and cap of the pump (on the ends of the impeller). When you install a new impeller it does not seal in these grooves. The old one did as that is what wore the grooves in the first place and that is why you did not notice a problem until after the impeller change. The new impeller thus leaks around the ends of the impeller between the impeller and body. This is generally not much of a problem unless there is air in the system like when running on a hose. The pump will not self prime in this condition due to the internal leak. If you can get water into the pump it will work fine (as you found out). Fortunately this means the pump will generally perform to an adequate level in normal service. Running off muffs on the hose is an entirely different matter however. The only solution is to replace the pump with a new one or the one made by Hardin Marine or to rebuild the old pump with the kit made by JC Marine that retrofits replaceable end wear plates.

Dan