So I did a leak down and this is what found.
With a 100 psi going in, this is what I got
#1-93psi
#2-91psi
#3-35psi intake valve leak
#4-65psi intake valve leak
#5-92psi
#6-85psi leaking into #4
#7-30psi leaking into crankcase
#8-93psi
Added a little oil to #7 and it's up t 92psi.
Pulled the heads and definitely was leakage between #6 and #4 at the head gasket.
All I have on the history of this engine is it was build in 98'. Just before I got it there was some t-stat work done. But there wasn't one in it..
It's already .030 over with SP L2465 pistons. Still hone marks in the bores.
I'm already thinking a bigger boat in the next year or 3 so don't want to dump a ton into this one.
What would you do? Hone, rings, bearings, gaskets, lap the valves and run it is my thought..

Take it to a machine shop and have them tell you. Most likely you will need a valve job bore/hone . It never ends even trying to do it cheap

How long has it been since last ride? Might consider a valve job and new gaskets and hope for the best. But #7 could have a broken ring so I'd pull the pan and that one at the very least. Won't take long.

I've only got the boat wet once as I just bought it end of season. It ran decent for the one ride on a 38° day.
Don't know how long it sat before that.
So there's#7
I'm thinking it was overheated.. That # 3 cylinder intake valve is warped. Did a quick lapping and there's one area not making contact. No evidence of it hitting anywhere.
Cylinders have some rust stained areas and a few scratches I can feel.
On the happy side, crank looks pretty good and hasn't been turned yet..
oh and one lifter was tight coming out. Can feel a burr on the bottom OD.
So.... Let's build a new engine..
Going to finish tearing it down and drop it at the shop Monday.

Glad I took it apart..

You might as well start tearing it down. Sucks but...

Already done, and ready to go.
Better now than in July..

From the picture don't look over heated to me. Looks like something got down into that cylinder.

I was referring to the warped valve, and the head gasket failure.
as for #7, IDK. There's no marks in the bores in that area.
More than likely caused by excessive heat and/or detonation.

is this efi or carbed