There are a few problems with raw water cooled engines, especially in salt water. I have owned three boats with small block Ford engines. My current boat is a 26' Shamrock with a 351W that has fresh water cooling system, I'll never go back to raw water cooling!
First there is the obvious corrosion that occurs in salt water, it can be minimized with frequent flushing. And flushing with products like Salt-Away really helps. If the boat has bottom paint I would assume that it has spent time in the ocean and did not make it onto the trailer for proper flush every time.
The second problem with raw H2O cooled engines is that most of them had very low temp thermostats in them, usually 120 degrees was used. This was done to minimize the crystallization of the salt in the water. The salt starts to crystallize around 140 and then gets trapped in the engine, which leads to even worse corrosion. But there is a trade off for that 120 degree thermostat. The engine never gets up to proper operating temp. Which leads to the cylinder bores wearing out very quickly. My first boat had a raw water cooled 302 that was very well maintained and flushed every time. The engine only had 600 hours on it but smoked a little. I bought the boat and ran it for a year. I was shocked at how much oil it burned. On a typical day of fishing the boat would run for 6-8 hours and would burn 3-4 quarts of oil! When I finally tore that engine down, I found a useless block, the cooling jackets were clogged with rust and the cylinders were wore out. The pistons were so loose that you could wiggle them back and forth in the bores. I have no idea how that little 302 was still running.
If you want more info on boat motors PM me, I could go on for hours.
Or visit my other favorite website,
http://www.fishtheclassic.net/home.php
I was thinking about this last night. I have a hunch that this boeat has seen salt water at some point in time. The PO said no biggie as he always dropped it into a local pond and run it to flush it out. Not sure how you check the block out for that though other than pull freeze plugs and look at the water jacket. Anyone ave any ideas there? I have to imagine Salt water can be severly corrosive. I know the boat has hull paint on it which is purposefully for salt water applications