'91 5.8l overheating problem help

Friend bought a "lake ready" '91 Ski Nautique with a 5.8l PCM motor, carb. Not lake ready. After 5 min water temp was 220+. Shut it down. Found impeller worst I ever saw. Hub separated from fins. Replaced entire raw water pump new. Thermostat (160F) was rusted closed so replaced that. Inspected lines and ports for impeller debris, and found none. Running in driveway (idle and <1000rpm with hose direct connected to hose leading to raw water pump. After a minute temp crept up to 180, 190+, so I shut it off. Exhaust manifolds are nice and cold and water is exiting exhaust pipe in back. Engine water pump is not leaking anywhere. So the question is, could rust buildup in block, heads, or other blockage in intake manifold cause this? Also, I've worked at Mastercraft and Correct Craft dealers for a few years, and never heard what the CC parts guy said when asking about new thermostat. He asked if I'd be running it on Lake Austin (65-70F water temp) or Lake Travis (~90F). Said he runs 160 on colder lake and 143 on warmer lake. I thought the thermostat would keep the motor at the proper engine temp, and that the temp of the water was irrelevant. And I'd never heard of this. Does this sound right? And would running garden hose pressure, even if it's high, be an issue because it's not enough water? I don't remember this in the 35 yrs I've been flushing my motors, but maybe I haven't been paying attention. thanks!

Your parts guys has found an alternative use for various thermostats.....back in the simple days, a 160 degree tstat was used on an engine with a closed cooling system and a 143 degree t-stat was used for open (raw) water systems....A good cooling system engineer will tell you that those temps (and applications) were determined over many years and became defacto standards.

Your garden hose usually becomes a limit due to inadequate volume vs not enough pressure (especially on city water - wells vary). You should be fine as long as the engine only runs at idle....keep you eye on the hose - if it collapses, there's not enough water in it to keep the pump happy.

finally, check for air leaks on the suction side of the plumbing to the pump...especially strainer lids and hose clamps that may have been removed for winterization....