You are setting yourself up for vibrations and the blow out you experienced...possibly. You need to balance the load on the blades for smooth operation. Trim position is TBD, by trial and error. You on a jack plate? I think the pad is forward of the transom by what, 6"? You running a 14" diameter prop gives you 7" radius. With AV plate even with pad.....extended straight edge, the shaft would be 7" below. Allowing 1" for pad setback and 1" for jack plate would move shaft to 5" below pad. You at 3 ½" puts you at AV plate 1 ½" above hull if no pad setback and no jack plate were there which would be reasonable for a setup on a heavy stern boat with lots of HP to get it up and out like you have.....all just my playing with numbers.
Closest I came to your rig was a 17' Ranger with a Merc 115 Tower. It had the typical Ranger pad hull, little more dead rise than most Rangers at the stern, with setback, no jack plate, and I was running the engine 1 hole up on the transom...about 1"....so that's close to what you are currently running if you have a jack plate....otherwise you "may" be a tad high. I was running the original Laser SS, don't remember the hole size (didn't have plugs back then) and had enough trim such that I could trim up till it started loosing speed and increasing in RPMs....when running full out. Not an expert but I have some experience and have picked up a few things on boating sites like this one, here and there over the years. You could always drop the plate if needed (if you have one) to check out other positions.....but the big guns on here always prompted to get your setup up right, then play with the prop.....so, lets continue with what you have....make sense?
We (I) are assuming that you firewall the throttle for the shot....step function thing...0 to max. I think you need to do as We recommended: Plug with 4 solid plugs and make several runs trying different trim positions in the hole shot. Some blowing out isn't all that bad (to me) if it results in the engine getting the RPMs up fast and doesn't amount to all that much blowout, since once the boat gets moving, aided by some porpoising....helps, the bite will improve and speed increase rapidly. I have come out of the hole faster with the engine perpendicular to the line of the hull, vs tucked all the way in and I think it was because I could get some ventilation which aided in getting the RPMS up faster, getting my thrust up faster, the porpoising helped the engine rev and bite and rev and bite. You just have to play with the trim and see what works best.
Then start increasing the hole size from your small plug (if you have received them) testing as above on up thru the largest. Or if you have your Delrin plugs installed, drill out 5/16" in all 4 for the first run and move up to ⅜ if you aren't happy. By the time you get there you should have a handle on where you want to be.