Double check that it's not in power reduction mode.

(copy and paste below from the merc book for MEFI-1)
-----------------
The two discrete switch inputs and the ECT (engine coolant temperature) sensor are used
by the EFI system to identify abnormal conditions that affect engine operations. If engine oil
pressure drops too low, or if drive unit fluid level (in the reservoir bottle) becomes too low, or
if the engine coolant temperature becomes too high, the ECM will engage the “power reduction mode”. The “power reduction mode” allows normal fuel injection and full power up to
2,800 rpm. Above 2800 rpm, fuel delivery is limited to 1 injector (TBI models) or 4 injectors
(MPI models) until rpm falls below 1200. The engine will then resume normal operation with
all injectors firing. If the problem goes away (while power reduction mode is engaged), the
engine immediately resumes normal operation.

We've got two of our very best guys working on it for you. We'll find it!

O yes it can be the injectors!! it can also be caused by low fuel pressure....anytime a efi engine is lacking fuel in the cylinders it will make one hell of a popping noise through the intake...most likely the screnes on top on the injectors are pluged up and not letting fuel through!!..

Could be, but if I understand correctly it cuts out at that rpm regardless of load. If it were fuel flow it'd rev higher with no load than with a load.

I am thinking valve spring as well. It would run fine up to a point and then float. You would also have an okay compression test as well. I had a 465 HP do this kinda thing to me and I finally checked and for a broken spring.

Possibly a worn camshaft or collapsed lifter, just my .02

I had the same problem on a 502 efi some years ago ,it turn out to be a clog fuel strainer that is located in fuel rail behind regulator

make sure plugwires go to right plug and they are separated, especially 5 and 7. just had this.

Well folks, this one finally got solved and the OP should be picking the boat up tonight. Thanks for all of your suggestions, but nobody was even close. I'll let the OP fill you in on what we found, but I will pass on one bit of advice / hint that our Service Manager passed on to me many, many years ago:

"All stupid electrical problems are a bad ground."

I will say that the two mechanics at our marina who worked on this boat checked absolutely everything - over and over again. Although they kept running into brick walls, neither of them gave up and every morning they'd show up with lists of new things to check for. When I heard the boat (in our launch ramp for the millionth time) fire up and actually rev past a couple thousand RPM for the first time this morning, you should have seen the smiles on these two guys faces. There were high fives all around. The key here - persistence and product knowledge.

Those grounds can get ya everytime!