I have a 99 Baja 272 with a 502, it overheated at the end of last season so I replaced the impeller and thermostat. It's been running around 165-175 consistently since, then the other day I took off and it spiked up to 190 on a hard run, I idled down and it dropped right to 150. Then on the way back home not running too hard it read 180-190 the whole way until I idled backed down and it went immediately back to 150. I have steady water coming out of the exhaust the boat runs fine, no warning light or buzzer, wondering if this is normal or maybe a bad water temp sending unit?

My guess is you have blown a head gasket and getting some exhaust gases into the block. Run a compression test

Keep throttle WOT when doing compression test

Wouldn't it have been doing that ever since the initial overheating if that was the case? I've put 10-15 hrs since it overheated and I've never had this happen. Oil looks good not milky or anything.

Your assumption is correct but IMO, the issues your running into now are leading my opinion toward a head gasket. Its spiking, and cools down once slowed down. Could also be something happened to the impeller, but checking an impeller can take more effort then running a compression test.

pull the hose off the sea pump going to the oil cooler and back flush the system, see if anything comes out.

I am curious, as I am fighting the same problem. Was the exhaust water at the tips hot to touch? Mine had lots of flow, but was hot. Were either of the manifolds hot to touch (that you could not keep your hand on it). Port was cool, starboard was too hot to hold on to. My temp gauge never moved from 165*-170*, but got an alarm. Alarm stopped on throttle down and starboard manifold cooled down as well. Oil cooler was clear of debris. Going to install new tstat and housing this week and try again.

Pull water hose on the bottom of the oil cooler and reach up into the cooler and check for debris.

If you dont find anything m try checking behind the plastic elbow where the water comes in from the transom assbly.

Yup, and his oil cooler should be mounted to frt of engine. With lower water hose off, you should be able to stick fingers up and feel. Very typical to find/feel lots of impellar pieces right there.

Surprised how many marinas don't do this after replacing worn out/busted up impeller. How can they not know ?

After this, and still heating up...then what Phragle said.