Just wanted to do a follow up here. Fortunately, this was a cheap and easy fix. As previously thought, the intake hose runnnig from the outdrive to the ITS box had a kink in it and it was collapsing on itself restricting water flow under acceleration and mid range. It was kinked on that dyno vid as well and that was the cause of the steam. Boat is running completely normal again, no more steam and running 30psi (analog) at 3200rpms again and the boat is running 20 degrees cooler and won't get past 145 in water temp.

Glad you figured it out and it was a simple fix.

Its great when people post the fix for their issues so others can learn from them.