1995 yamaha 200 dead? fuel in the water??

I love my 1995 Yamaha 200 2 stroke and somewhat scared of a blown head or rings… but maybe I am just fatalistic??

Went out for a quick fishing trip over the weekend and had some issues with my Yamaha. We were running the boat for around 30-40 minutes at ½ throttle and all was well. I then bumped it up to around to around ¾ throttle and after about 3 minutes the alarm went off as well as the RPM regulator. I slowed down to an idle and then the alarm immediately stopped. We idled for around 10 minutes or so and noticed that when in neutral there was a lot of unburned fuel in the water?? What the heck does that mean? After a few minutes I ran the engine at around 1/3 throttle and no alarm but may have lost a bit of power.

So, does anybody know what the fuel in the water might indicate? Hopefully everything is ok as I cant afford a re-build and really baby this engine and surprised if anything serious happened.

Is it firing on all cylinders? What do the spark plugs look like? When was the impeller last changed? Maybe you picked up a plastic bag in the water and blocked water flow.

Check your oil level. If you pump the fuel ball does it get hard? Leaking fuel pump will put fuel in the water.