My setup is a freshly rebuilt 455, Bassett headers, pressure relief valve set to 15psi with overboard dump. -10 from the pressure relief valve to a tee. -8 lines to the water plate. -8 lines to the thermostat housing. One -8 overboard, one -8 to a ball valve and to the Bassett tee.
One curious thing is the overheating seems to coincide with the engine rebuild but I can't find any reason that it would be the engine. I can't find discernable hot spots with an infrared thermometer and there doesn't seem to be a restriction in the flow through the engine. I've even plumbed it so the water travels backwards through the engine as a test.
On the hose it will idle at the correct temp with the hose full blast but it should be COLD.
The prop is a blueprinted bronze A cut. The pump builder said he had to custom machine the ware ring due to the early suction housing dimensions..
The ball valve should be on the overboard line, and better yet a gate valve.
More questions:
Do you currently have a thermostat installed now?
Are you getting good flow out of the -8 overboard?
Boring the suction is common, I have done many. You said the wear ring had to be machined, did you mean the suction?
Thinking about what could fail during machining and assembly of the suction and wear ring. The cooling passage is awfully close to the wear ring bore. If a shouldered wear ring is installed without trimming the insulator, the wear ring could sit higher, blocking the cooling port. Maybe the insulator is pushing out, blocking the cooling port.
Could you pull the bowl to inspect it? You can see the cooling port between the impeller and flange.
The suction itself has no bearing on water flow. I'm sure it is not the suction housing.
You have the bypass dumping overboard, can you see when water is bypassing? Is it bypassing at idle? I worry about a bypass depriving the engine of water by dumping it over the side before it has a chance to cool the engine.
When you run it on the garden hose, do you have a lot of water dumping out of the jet intake, or do you remove the hose from the jet and run all the water through the engine with none flowing through the jet? Is water being bypassed?
You mentioned that the heating problem corresponded with the engine rebuild. Have you tried turning the engine over by hand? Is it tight? I would think that if the clearances were too tight, it would have already self-distructed.