How about it mechanics, any ideas?

1989 Evinrude E25TECEM
Already installed new water pump kit. Removed thermostat and cleaned under
the cover and closed back up w/out t'stat for salt-away cleaning.
water tube under any water pressure fills all chambers and streams out telltale hose.
Started up and only steam and exhaust smoke come out anywhere there is an outlet.
Also when running,water comes out a 3/16 hole behind the propeller hub on the port
side of foot. A factory hole. Should I start looking under the exhaust cover or the bypass
cover, or do I have a major problem?
Appreciate any help or ideas

My first thought is that possibly the head gasket is not sealing ever so slightly which would allow the combuustion to leak past the sealing surface of the gasket into the water passage area.

This is a tremendous amount of pressure, much more so that what a water pump would exert or your garden hose... hence no water going the other way "into" the cylinder BUT pressure (combustion) entering the water passage area.

That sealing surface of the head gasket is something I'd be looking at. The exhaust baffle plate assembly would be my next stop. Keep us updated.

We are thinking along the same lines, but I was worried that it may be the inner exhaust tube.
got most of the bolts out before it got dark. Will be looking at the inside tomorrow. Get back to you then.

joereeves, the head gasket may have been leaking as it showed oil about 3/8 inch at the bottom to water chamber.
Also the exhaust babble plate gasket had a raised bump with corrosion under it and a hole pushed thru. Looking at block behind baffle plate and cover, it has corrosion accumulation in water sections on left, and is clean and bright on the right in the chamber with the telltale tube. Had three bolts wring off, two below the top of the bottom cover. Need to know if the cover can be moved around to work without complete removal? Or, do I have to remove the powerhead and risk wringing some more off? Thanks for looking and the help.

PS the bottom cylinder was wet with unburned oil also, and the top cyl. was dry.