The hole in the exhaust probably was caused by corrosion, not heat. (If it was heat, you have way worse troubles than the exhaust!) So, I'd compression check it, and if all was good, I'd JB weld the exhaust hole. Be sure and CLEAN the hole real good, and back to GOOD metal. Dremel moto tool would be handy to do this. Small wire brush on end of electric drill would do it too. What you want is to CLEAN it good, and then if it became a big hole, while cleaning, place a bit of screen from a metal screen door on it, to hold the JB while it dries.
Your post is a bit sketchy from there... are you leaving it in the water? Has it been run in salt water?
The alarm, sounds like a temp alarm?
If so, seriously flush it out with a hose. I'd even turn it on it's side, (maybe not 90°) with the hose on, and motor running, to get the sand or other junk out of the head. Look up "flushing sand" or "Flushing debris" with the search function.
I have not had to flush mine like this, but I have seen pics of the areas that trap sand, and other stuff, and prevent the cooling sys from functioning right.
I hope this gives you some ideas, on where to go from here.
Nate
