First, is this where I fill the bowl with oil, and if so do I use 90 Gear Oil?
Second, Is this bad that all that came out of the lower plug is a likke grey slop and a lot of water?
Last, could this be causing enough resistance to be causing the "valve lash" noise I get above 3000 RPM's (I only get this noise when the boat is in the water, It runs perfectly at all RPM's on the trailer.

First of all yes put 90wt in your pump.
Are you sure it is not too much timing that is causing the noise ?
The center pick up pan will not cause a problem at 3K or even 5600RPM, I know because I have raced 8 heats with one on a almost bone stock junk yard 460. If it is not too much timing I would look at readjusting valve train or longer pushrods. What can cause too much drag is improper impeller thrust clearance. This causes gawling of impeller andwear ring as well as sometimes suction housing.

You can call anytime;

Jim

This all depends on your bowl seal on the shaft. Fill it all the way up till it comes out and then let it sit and add some more. Any Oil wt is better than none or milk. I alway fill before an event.

How much money do you want to spend ?

well i dont want gold ! 

Then run the cheepest stuff you can find.

I think I figured out the valve clatter.  Rockers weren't tightened down correctly.  Got compression back in 2 cylinders   Any suggestions on a good place to get the pump rebuilt in San Diego area?  Gonna go test today and see if my problems are solved.

I think I figured out the valve clatter.  Rockers weren't tightened down correctly.  Got compression back in 2 cylinders   Any suggestions on a good place to get the pump rebuilt in San Diego area?  Gonna go test today and see if my problems are solved.

Box it up and send it to me !