Water pressure....?
From your post and the age of your boat, I bet I know exactly where your leak was. It was on one of the welded up-raised knobs (for lack of a better name). This is where the water jacket is seperated from the exhaust.
The water comes in from the pump, into the head, where it crosses the top of the cylinders (protection from detonation) and into the tuned head pipe, where the water is preheated before it goes into the block for cooling. There is a small hose that goes to your water regulator and bypass. When you are idling at slower speeds, the water regualtor is closed, sending water to the connection at the bottom of that head pipe for exhaust cooling through a calibrated fitting. When the boat speeds up, the water pressure overcomes that of the water regulator, closing off the line to the tuned pipe and spraying it directly into th exhaust through a calibrated fitting under the regulator.
The water pressure blew off the regulator. Now, you've got to find out why. I can think of only two possible causes at the moment. When the pipe was welded, the diameter of that flow path was closed up either a little or a lot. The proper way to weld these "knobbed" areas is to clean it up, lay a small piece of aluminum over the top and weld around it. If the welder welded from within the hole, this may be the case (which you say your tell-tale stream has a lot more pressure, so it may be on the engine side of the head pipe). If not, the only other thing I can think of is the gasket at the manifold not being put in correctly. I had a member this past spring, not put the gasket on correctly and it caused a restriction of flow and the engine eventually over heated.
There is one more thing. Those elbows you see connected to all the water inlets and outlets, are calibrated. So, if you removed one and replaced it with something else, like a standard elbow or "T", this will cause high pressure. With this cooling system being a TLCS (total loss cooling system), the water is regulated by these calibrated nipples to make sure the entire engine stays flooded for cooling.
Restriction to flow? If you have a restriction in your water supply to the engine, then you should see this at the outlet side of the head. You may be able to take off the hose at the back of the head plate, on the starboard side and turn on some water for a few seconds (from your hose connection, engine running) to see what kind of flow you have coming from the engine. Being on the back of the boat, it will only go into the bilge.
Let us know what you find out.........:cheers: