As others have stated, bump your idle 750-800rpms. Running cold water on the hose and your engine not getting hot will cause crazy condensation. Cold or near freezing ambient temps make it worse.

Process of elimination from here

Pull your risers, extend your manifold watet outlet hoses over side of your boat, run engine with no risers at idle. Will eliminate your risers, condensation, reversion and narrow your problem down.

I ran the XM276HR in a 355 years back and extended the risers 16" past stock location to prevent water from pooling in manifold center runners.

ok, some good things for me to look into. really appreciate the information. I am going to get started on this stuff today. I'l do the easy, quick stuff first.

The ambient temps here are around 50 degrees and I am pulling water out of a 50 gallon feed tank through my crank mounted water pump. The water is from my well and is pretty cold. No drive currently on the boat.

I'd bump the idle and get some kydex (plastic sheathing) and with a heat gun you can make a nice custom cover for you wire connection terminal etc to help prevent any catastrophe plus it will improve the looks on what you've already done a great job on. The filter, fuel line and fuel tank all within less than an arms reach. Just a suggestion but seriously nice work and I think you have more of a condensation/idle issue going on.

Might be worth checking valve lash.
An exhaust valve that isn’t closing/sealing completely can cause reversion.

compression numbers wouldn’t have been within 4 psi if a valve was hung open

True.......my bad.

Thanks for the idea about the cover for my electrical stuff. I'll definitely put that on my list to do before I finish this project.

Beautiful work.

Im thinking condensation too.

Here is a picture of my oil. Pretty milky. White goopy stuff everywhere.....it's a hot mess. Spend most of last night cleaning it with diesel and fresh oil.




Could my oil get that milky from condensation after about 15 minutes of run time?

Since it is January, I am going to go back through the things I have done to this motor and just double check everything. Head gaskets and intake gasket looked to be leak free upon dissassembly.

What a mystery.... That sucks as it certainly appears you did an A1 build and didn't scrimp anywhere. Sealed both sides of intake gaskets around the water ports? Assuming you did and had a good fit. What intake is that. Still nothing would explain the water in your exhaust manifolds. You likely didn't get it hot enough on the hose to burn off any water in the oil. Assuming you used the correct head gaskets for whatever gen block/heads you have. I've had milkshakes years ago at the beginning of my boating days but it was very early on and had 108 lsa crower cam. Wasn't really much talk back then about reversion. Ran the cam last half the season then did a swap. Btw my oil looked way worse until I'd get out the channel. Your deal here is strange all the way around. To bad you couldn't have pressurized your system before tear down. Oh also did you haver water in your ports. Hopefully you get this resolved.

Nows the time to find but woulda been nice to have been able to take a half hour run etc given the weather didn't suck and then see what you had.