If it is rattling on tip out it is prob not detonation, something is loose, rod bearing,wrist pin, piston slap. Did oil pressure ever drop off again? Have you verified with manual gauge?
My advise, which no one follows including myself, rebuild it bone stock to factory specs .Put gas in it and have fun. Don't buy cheap parts. Check references on shop doing machine work.

So how does the power reduction mode work? Only goes up so high in RPM or kills cylinders to limit power? Engine serial number 0F764338. When I started the engine cold I got a spit back through the intake which is making me think something with the cam or lifters even though there is no valve train noise at idle.

So it randomly stops running, seizes up, turns over slow, looses oil pressure ,knocks and backfires when you try to start it? ... did I miss anything ?

I can hear something faintly at 1800 RPM that sounds to me like the cylinder isnt firing but I check that spark is making it to each cylinder. No oil pressure was 30 psi at idle. No manual gauge as the dash gauge is working meaning its showing pressure now.

Lets talk about your advice. Im thinking its just best to pull the engine and rebuild it. I cant in good conscience buy high dollar marine Mercruiser parts when MOST are the same as a standard car engine. Why build it back bone stock? I saw someone state Tyler Crockett has a cam and head upgrade that bring it up 100 hp. However I dont want to sacrifice reliability or gas mileage but it would be nice to be able to go faster when i want to. Compression did test 125-135 psi which seems low for this engine but its been that way since I bought it and isn't related to this problem. Might make a new post about proven combinations and where to find a good kit.

Well yes and no. Its acting different out of the water with no load on it. In the water yes it slowly died and wouldn't turn over. 2 hours later it starts up and back on plane it died and stopped turning over again. In the driveway it oil pressure gauge did go down to 0 warm at idle. Shut if off change the oil and filter and all is good there now but runs idles and sounds fine in the driveway with no load on it. at about 1800 RPM sounds like a dead cylinder. Rev it i hear a distinct knock coming back off the rev. On start up it did back spit through the intake once. Never heardit do that again. Today Im going to pull the valve covers and look at the lifters cam lobe operation. If it all looks good Ill probably pull the engine. As bad as I hate to not knowing what it is.

Did you adjust the timing during this whole.scenerio ? Without putting it in base timing mode?

No I put it in base timing mode and made sure it was @ 8°

It was running great and during that run decided to slowly died till it froze. So I assume the timing was fine.

First I've ever heard of of MEFI 1 having the power reduction mode. Found an old post you post you made.
Can you elaborate on the specifics for the MEFI 1?? What makes it go into into the power reduction mode?? Is it like the pcm555 with varying reductions or ???

Yes please elaborate because Im pretty certain mine is " MEFI 1 93-95 year models - the largest MEFI ECM in dimensions HAD POWER REDUCTION MODE"

How do I determine if it is in power reduction mode? How do i get it out of power reduction mode?

I don't recall all the MEFI 1 power reduction modes but I know one is low drive oil. Cuts fuel at about 2500 or 2800 rpm if I recall.