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2003 GTI LE Starting in Water Problem

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We have a 2003 GTI LE which was bought used, it has so far had continuous problems which have resulted in all new engine bearing, gaskets, reconditioned crankshaft with new con rods and recently a new starter motor...

The current problem is that it starts immediately and easily out of water on trailer, but after only 2 minutes dropping it into water it then will not start. The starter turns over and engine will fire once occasionally but then immediately dies. Pull it out of water and it will start immediately.

The last two times that it was running, after difficult starts, the revs also became "limited" despite throttle position.

Unfortunately we live on a remote atoll of islands so obviously no dealership! Just our local outboard engine mechanic, who although knows his engines, is not a Rotax engine specialist so any help would be really appreciated!
 
I'm going to venture to say that a compression check will indicate lower compression on one cylinder than the other. Get that checked and let us know what the results are.
 
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