I noticed that you said you installed new water pumps. Do you mean impellors, and if so were the old impellors wiped out and chunks missing?

Boat was ran in the water in the slings

Replaced the water pumps over the winter cause I had purchased the boat in November. Before the boat went to storage it did run in a well for a hour or so and there was water coming out of that muffler. (I have video) there was water coming out of that muffler when I first splashed it this year. Had a u joint blow needed to pull the motor to replace transom assembly. Put it all back together and now have this issue.

I did back flush the whole system. I forward and back flushed the heat exchanger, check the oil cooler for blockage, back flushed the header, ran water in the diverter port all seem to flow good

Is it possible to have gotten a slight twist in the hose from the helmet to the transom assembly, I remember reading to caution against that while reassembling mine.

Not unless they did it at Mercury. But I will check that

My header overheating issues were caused by a clogged heat exchanger. The engine oil cooler was plugged. Looking at the front of the engine, the cooler is on the back side. Its tucked in tight and hard to get to. Unscrew the center bolt, Open the left side and clean out the debris. I had an old impeller stuck in mine. Back flushing didn't do the trick.