So long story short, the transom is wet in my Formula 292 Fastech. My question is, would it be wise to run it for just this season and then have it rebuilt in the offseason? I ask because I have already paid for my slip (just over $3k). What would everyone suggest?

I’d be nervous. If you do run it keep a close eye on it. Check for extra water in the bilge etc.

I had no idea it was wet until I drilled into it to mount the hydraulic steering. Some of the wood is still dry but alot of it is wet. As far as the hammer test goes, it hasnt started to delaminate.
And i was definitely guilty of that, my old scarab had a wet transom and stringers and I had no idea until the engine mounts ripped out.

My theory is exhaust water leaked between the transom and the hose (you can see the water marks). I never had any water in the bilge last season. Boat never sits in the water, always on a trailer or hydro-hoist. And heck yeah I'm nervous.

There is a wet transom and a rotted transom. As stated, many people have run a lot of boats with no idea that the boat was in dire need of rebuilding.

Is the transom flexing on the drives? If it is to any extent, you are on the sidelines until it can be rebuilt - in current condition, you are the only one that knows the extent of what you seen and carry that risk..

When you attached the steering, did the transom mounts compress the hull as the bolts were tightened?

I had a '67 Formula 233 that the transom was SO rotted, the hydraulic steering ram visibly flexed the transom....
I added an additional inner and outer plate.. Ran it for TWO years with NO issues...

Your 292's stringers are all fiberglass so nothing to worry about there.

Transom... wet is a whole lot different than rotted. Most boats will have some degree of moisture in the transom. It's probably not done for yet, though you will need to keep an eye on it, and eventually, address it at some point. To gauge how bad the issue is, you can take some small core samples from around the area that you found wet wood. If it's small, you may be able to dry it out, and flood those areas with thinned epoxy to stop the process. I would definitely find the source of the water intrusion and correct it as soon as possible.

Scarab is French for wet transom. "Oh wee, wee...you appear to have a Scarab!"