I am going to look into this tomorrow. I will let you know what I find.

Wouldn't a issue with the safety switch be present on the trailer when running? Most boats with transmissions use a neutral safety switch on the trans itself.

As ive said a couple times, I'd look into the carb. But apparently the O.P. isn't interested in that.

I will look into the carb and appreciate the help very much. I am not able to get to the boat right now but when I do I will let you know what the screws are set at. I hope it is something as simple as that. Thanks again for your help.

Sorry wasn't trying to be a jerk, just I've seen this a hundred times. The carbs always need a tweaking after being ran on the dyno and installed in the boat. Keep us posted

Yes.but as mild thunder said look to the carbs first.lot cheaper.i still have 1 motor the rpm drop is greater than the other however i haven't had a chance to play with it with this wonderful weather we've been having here.

what kind of ignition system do you have? I had the same issue on my scarab years ago....turns out my MSD distributor had one broken spring inside it...ran fine when at idle...could rev it and everything....but would die as soon as it was put in gear....

I have a brand new DUI Distributor.

Timing is set to 34. Is that where it should be?

That is the total timing which is fine, but what is the idle timing set at? As Mild Thunder stated "More timing advance at idle (must make changes to ignition system via a different module, springs, or whatever your setup is, cant just turn distributor)".
But I would definitely start with adjusting the carb, because the back fire "assuming the back fire is through the carb" indicates that it is running lean. Fix that and it will have the power to go into gear.

What carb do you have on it now? A 850 has to be set up different than a dominator.