if that is infact occuring, then you have a leak somewhere.
I'm kind of confused but lookup '951 cooling system', I posted the diagrams on this forum a while ago with all the info.
As for leaking into the motor, you are saying that, after running the ski, in a body of water, then letting it sit for a period of time, you pull the spark plugs and are able to get water out of the engine?
If you are running it on a hose and shut the engine off first then the water second, you will force water into the actual combustion chamber.
the 'engine' will always have water in it, it's open loop cooled. which is why, in northern climates you must drain it and or fill it w/antifreeze.
and yes, the exhaust system is also water cooled, generally there is always water in it, it exits when the engine is running.
Does this make it hard to start then? foul the plugs?
My guess would be either someone's turning the engine off before turning off the pressurized water at a house, or there's a leak in the head gasket, but that would show up as a massive loss of performance.