It is not a closed system.
My mistake.
You did say: "It is fresh water cooled with a water pump."
FWC is often use in a misnomer fashion to describe Closed Cooling.
I am not sure if it was caused by freeze or by temperature of water being to cool on the hot exhaust manifolds,
The manifolds will receive coolant (water) long before temperatures are up.
i am thinking the latter, since it was always drained in the winter but i suppose rust could let the water not drain completely. I am thinking maybe the thermostat was letting to much water into the cooling system and cooled the exhaust to quickly thus cracking them.
See above!
Also, most coolant will be by-passing the actual engine cooling demands and will be going out the exhaust system.
This is a fresh water system.
Meaning that you're operating in lake or river water... yes/no?