I have the same set up in a different boat.  Need more info...Where are you seeing bubbles?  Does the nozzle trim up and down fully with the boat on the trailer?  There is a physical limit on the trim range where the nozzle pieces make contact, is it close to that in its articulation?  The trim motor should move from full down to full up position in about 5 seconds.  If it is much slower then it may be an electrical issue such as a weak charging system, battery or bad diodes in the trim control circuit.  Is the trim pump reservoir full?  Is there a chance that the reservoir might have been submerged?  Water will make the fluid frothy and it won't hold the force necessary to keep the trim up under throttle.  These units self bleed provided there is enough fluid in the reservoir (almost to the top), the nuts are tight and there is no water in it.  I just realized the word "trim" may confuse newbies here.  On inboard and outboard engines they call the tilting effect "power trim".  These "diverters" are really power trims and use the same hydraulic pumps as inboard and outboard engines.

When all is working right it should resemble this:


Or this:

Does trimming up give you some bow lift and increased speed?  I would try a full throttle run and trim it up all the way, then slow down and shut it off without touching the trim again.  Peek over the back and see where the diverter angle / position is in relation to maximum up travel.  Again, make sure the connections are all tight.  Is there any fluid leaking out?  It sounds like air is getting sucked in at one of the fittings or solenoid valves.  The most common trim pumps are made by Bennett.  The ones in jet boats have four cylinder shaped solinoid controlled valves.  They are hand tightened.  Check them (righty righty).  It is also possible that the wrong fluid is in the system.  I use Mobil1 transmission fluid.  One other thing to check is for a slipped O-ring in the pivoting joint.  They sometimes pop out of the recessed groove and get pinched preventing full articulation.