Oil and water temps were normal.

you had detonation(the crusties at the edges of the piston),its running hot,valve seats have been pulled and they are now leaking pretty good.

Was it in base timing mode when you set it??

Post pics of the spark plugs

Looks like it is pulling the gasket apart which also indicates detonation. Ring gaps might be too small and piston to wall clearance like others have said. Does your builder do many marine engines ?

Also looks like somebody sprayed the gaskets with copper coat ? Those gaskets are designed to go on the way they come out of the box. They have a coating on them that "flows" when heated and putting copper coat on them defeats the purpose. But that did not cause your failure.

stock cam and compression, stock tune on ecm? fuel pressure verified at wot under a load?

Just curious . . . . . why did you have it rebuilt in the first place ? How many hours ?

Will do. Base timimg was at 8. Could have been 10 but it was a year ago when i did it.

I was getting water in the cylinders coming thru the flaps. Had a valve head break and rebuilt. maybe 30 hours after rebuilt. was at .30 over now at .60 over.

Stack cam, compression was 155 after rebuild now all cylinders dropped 20 to 25 since this has been happening.

Yes