Re: engine over heating
That engine does not have a thermostat. Double check your impeller installation..... a scored water pump plate or badly pitted impeller housing could kick up a air pocket.
Seal the impeller plate to the lower unit.... and the impeller housing to the plate with "Bombardier 3M Product #847" sealer, available at any dealership (or at least it should be). The lack of this sealer could (and usually does) allow the water pump to draw air.
When running, whether in a barrel or on a boat, at a standstill, the water must be a couple inches above the water pump location. When on a boat, the cavitation plate which is just above the propeller must be approximately 3/4" below the bottom of the boat, no lower than 1"..... and absolutely not above the bottom of the boat.
If the above is as it should be, I would suspect a slight leakage between the head gasket and the water passage area. If so, inspect the sealing surfaces of the head and block and correct if needed. Tighten the head bolts in the following sequence.
9....10
5.....6
1.....2
4.....3
8.....7