Have you checked ignition timing? Timing that is retarded will cause an engine to run hot, and this could also contribute to it dieseling when you shut it down while overheated - the engine will actually kick backwards for a rev or two, as BlueThunder mentioned. With prop exhaust this will most certainly suck water back up the exhaust into the cylinders. The little flappers might not be enough to stop this, either.

Just an idea...

I don't mean to insult anybody with this , but are you installing the thermostat upside down? This causes overheating pretty quickly.

Just a thought.

I think this was mentioned before, check the head gaskets, most are not left and right they are made the same, the water holes have to be cut in the gaskets on the rear of the heads, they have one cut in but not both. I had a problem similar and the heads were cooking, not knowing the gaskets had to be cut for the water.....

One more thought, I run a water pressure gauge from the block, it will show if the water supply is getting cut off or restricted