I had the same problem on my 1964 18hp evinrude,the problem was the head gasket.Apparently,the water pump and impeller can be working,but a blown head gasket interupts the water flow.I got a reduced flow out of the water exit on the leg,and steam.
I was advised on here to also change the exhaust water jacket gaskets as they can leak water into the cylinders and damage the bearings.
My stat was jammed open(because of the overheating)I am replacing that as well as the head gasket.
I put new coils/points/condensors and spark plugs,plus a carb kit and stripped and cleaned the carb with carb cleaner.
The motor was running like new.Unfortunately,the one thing I could not check was the head gasket and exhaust water jacket gaskets.
I must mention that I got some great advice on here.(KIM Maple valley)