Could have a leaking manifold gasket, thereby allowing cooling water to leech into the manifold. Or, it could be a leaking head gasket, or possibly a cracked head, which could be the result of overheating.
The engine should run at about 145 degrees, and hold about 40 pounds of oil pressure. A compression check will tell you if you have a leaking head gasket, and possibly a cracked head, but it will not tell you anything about the manifold.
Kinda hard for me to diagnose from here, but the folks on the Moyer Marine Forum may be able to shed more light on the subject.