Horn wire does not tie into cyl head area.
Look at the electrical connections on the port side behind that small panel. You will see three large deutsch connectors that connect the boat side harness to the engine harness. Note the colors of the wires. One of the connectors has purple, black, red, etc. (multi colors), and that one is the connector that runs to your key switch. Sorry, I don't remember all the colors off the top of my head. It will have wires for ground, +12v, switched +12v, primer solenoid, starter solenoid, and kill wire.
The other connector is almost exclusively tan wires with stripes. Tan, tan/yellow, tan/black, etc. That connector is for your warning horn system. These wires feed directly into the back of the systems check tach. The tach then controls the warning horn on that tan/blue(?) wire that you say you have already grounded for horn testing.
So, the circuit at the horn is purple(+12), ground, and the tan/blue(?) signal wire. When that tan/blue wire goes to ground, the horn sounds. The tach drives it to ground when the tach senses one of those other tan lines coming from the engine has triggered (switched to ground).
The whole system works based on the concept of these sensors switching to ground when the fault is present. Overtemp, the sensor in the head will switch to ground. Fuel restriction, the vacuum switch right there at the fuel pump will switch to ground. No oil, the tan/??? line coming from the OMS fuel pump will switch to ground. ETC. The tach knows which line is active, turns on the appropriate light, and sounds the horn.
You can test all these systems by simply groundiing the tan wire at each sensor, with key on, and watching the lights on the tach. The horn will NOT SOUND when testing in this manner UNLESS THE ENGINE IS RUNNING.