OK, 2 sides to this response. MY sides.
I tried a pressure releif valve, and a pop off valve on Moo. The pump just simply pushed back too much pressure to the engine and eventually hydrolocked #3 a tad through the headers at the Tom Papp deal back in January. That is just the start of the story on what went wrong with this engine. The main problem was me dictating the tight tolerances I did, but that's another matter. The boats original engine only lasted 20 minutes in stock form and far less formidable conditions, I'm pretty happy I got a year of very hard running with it this way with the new engine I put in it. Now that I kinda understand what went on, not gonna make the same mistakes three times.
You do NOT need a pressure relief valve tied to another O/B dump. A pop-off might not be a bad idea for the paranoid (ME), but even that is unneccesary.
Skip is gonna argue with me for this, but here's the reasoning. You said closing the gate valve off the pump caused abnormal temperatures. I'll get into that in a minute, but the gate, or ball, valve there is the only proper way to regulate water and pressure to the enigine. If you run a true pressure releif valve, or a pop-off, that runs water pretty consistently, that is lost thrust, or intake water, from the pump, IMHO. Lost performance, lost speed.
A water pressure guage on the engine is the only way to know what is going on here. I suspect a block partially full of sand, dirt, or worse, myself. (Don't ask me how I know this, it all relates to Moo). Run a sand filter of some sort!!

Otherwise, choking off the water coming into the engine (A sign of a good pump), is the only way to really alleviate the situation.
Just my .02 again........

Ray