Cooler Check First. Keep it simple and rule that out. Might be a really small crack that only shows up after hard runs and oil is thinnest. I wouldn't run it much till figured out. If it gives way, you will have no oil and be in trouble in a hurry. Just my 2 cents. At least you have a large Pan.

Would a bad oil cooler cause oil build up on the back of the boat though. Would it get hot enough to soot up, I dont see a sheen on the water while it idles

496 does not have a PCV valve

YOU are 1000 % correct and I had no idea as from the start it was mentioned a 496. . I do not have the time to read all the posts but skim thru after the first post for most threads up here. . As boaters looking for help they should post all the important details and EXACTLY what they have so they can get the correct answers to help them out accurately from the get go. Thanks again for clearing up the exact engine

if i am reading this correctly this engine is a bored&stroked 454.that would be 4.310 bore with 4.250 stroke.if the oil cooler checks out and found to be good it could be a multitude of things,cracked block,blown head gasket cracked head,a lot of things to check.

Mike we all have to back up and ask was this boat properly winterized and by whom ? says compression good at 150 and NO power LOSS --- I take it then with those statements he can run full max RPMS and runs good as full power is felt thru out.

. I NEVER seen a marine engine with bad valve train components and or low compression and or very poor ring seal - blow by runs without having rpm issues and a true PIG thru out all rpms. - .

i agree,living in the midwest i get a few calls every spring from people with similar problems.cracked oil cooler was the first thing that came to mind but around here winter can cause all kinds of issues.