1974 20ft Starcraft Ford 302 V-8 Overheats

[jwderque]

I have a 1974 Starcraft 20 foot runabout with a 302 v-8 with a mercruiser 888. I don't know the first thing about boats. But I can run the boat at 2200 rpm and will stay about 150 degrees. I have pulled off the octopuss cooling system and replaced with a brand new 140 degree thermostat. There is water flow through all the hoses. I had it in the water and pulled the hoses off and the top set of hoses had exhaust fumes coming out. If I run it higher rpms for 3 or 4 minutes it gets HOT. Is there a problem with the risres and or the manifolds? I can run all day at 2000 rpms and it stays at 150 degrees. Please help with your opinions or fixes. They let the lake levels down here in a couple of weeks and I wanna take the kids out if I can. Thanks for your help! God Bless!