Only 2/3 power, fouled plugs, engine seize?

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Daytona

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Last year we bought my sister-in-law's '97 GTX w 150 hours on it. It had always been annually serviced and had no issues when she had it. Last year, after having it one month, by 15 year old daughter beach it while running. We pushed it back into the water, re-started, and everything seemed ok. However, soon after it was down on power and would not rev past 5300 RPM. Dealer looked at it, and replaced fouled plugs and the wear ring. When we took it out again it would go to full power the first run for a min or so, then would not run over 5300 rpm again ( about 2/3 throttle). Took it back to dealer, they said an exhaust gasket was bad allowing water and steam to enter the engine compartment. Gasket and fouled plugs were replaced, but same symptoms returned. Back to dealer again, this time they say the engine had seized at some point and the plugs will always start fouling again and it is not worth fixing due to cost. I'm familiar with 4-stroke engines but not 2 stroke. What should I look for to determine if an engine seized? Wouldn't a compression check determine any ring or cylinder wall damage? Can the block be bored with oversize pistons. In other words does the symptoms correlate to a seized engine, what should I look for to determine this kind of damage, and what are my options for repair if I do it myself? Thank You in advance for any advice.
 
Bottom line you need a shop manual for this. You will probably need to pull the engine if what you are saying is right, and rebuild if seized. You are right about the compression test, and if seized it won't turn over.

It is possible to have a bearing problem, but if it is turning over then by definition it is not seized.
 
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