Larry,
The first thing I'd suggest is getting rid of that mickey-mouse manifold setup. It is definitely not needed nor desired. The water heater should be plumbed between the thermostat housing and the circulating pump on the front of the engine. You may have to get some nipples to connect the hoses to those points. I looked up your membership. Being a three-year member of C36/375IA, you received a Tech Notes CD when you joined. Find the CD, and look up the M35 Operators Manual on the CD. The M25XPB(C) is NOT the same as the M25XP!!! Its specs and diagrams are included in the M35 manuals. Page 26 shows the water heater hookup points. And yes, it's a good idea to separate your questions into two or three threads. Easy enough to do by editing your post.

Larry,
If your tranny has close to the same reduction ratio (1.89:1)?, then the autoprop should work perfectly. Your M25XPB has 26 hp. My M25XP had 23hp, and I thought the prop was a tiny bit too much for it.

Larry, I sent your name to Ralph and you should have a CD underway to you. Note they just (latest edition) became available, and Ralph is busy getting them out.

PS looking at the pictures you posted that was the same hookup I had on my 1984 Catalina 30. There was a detailed explanation in the owners manual as to how that was to be used.

I was just installing a new water heater. I will try to send pics in the next few days, but what I did was find some 3/4 mpt to 5/8 hose barbs, and installed them on the thermostat housing, and the exhaust manifold entrance. Then used that loop to run to the water heater.

My boat had the water heater and all associated plumbing removed so I was going from scratch. My engine didn't have the manifold or any of that and I see no great use for it. I'm trying to keep everything as simple and straightforward as possible. Also with a new motor you may not have any problems just replacing the 10 inches of house that connects the thermostat housing and exhaust manifold. Mine was jury rigged to say the least and I felt that actual hose barbs would be more vibration resistant than what I had.

I preferred to make my water heater loop off the front of the engine to make those connections easier for visual inspection, and I didn't have as tight a bend radius trying to get it all plumbed into the heat exchanger.

Cheers

Here is a picture I took of where I put our water heater loop. The shiny new looking hose. Pay no attention to mess the rest of the engine is.

Before I put those hoses on, there was just a small bit of hose that connected those two ports.

Hope this has helped.

Cheers

In my humble opinion I think you have compromised the cooling ability of your engine. By reducing the water pump outlet to 5/8" from 7/8" you have cut the water movement in half. The idea I believe of that water manifold was to restrict the cooling water to the WH so that it would not take too much from the engine, now you not only reduced the size but directed all the engine water to the WH.
My 2¢ worth.

Alex, maybe not. Here's why: with NO wh, the "bypass" line on the engine from the coolant pump to the base of the thermostat is only 3/8" anyway.

The lines to the HX are 7/8". On my boat, with a wh, the takeoff lines from the pump and thermostat are 3/8" and then go up to 5/8" to the wh. Never been a problem.

If you have no wh, then that bypass line line is still "only" 3/8".

That is not what he has... He is not using the bypass, but diverting all the cooling water through the water heater and has reduced the main outlet to 5/8". Your system is correct in that it uses the bypass for the WH.

Alex,

Thanks for the info. I will go back and look it over. The short hose I replaced to do this loop was a 5/8 hose, so I thought no harm no foul. Back to the drawing board.

Just wanted you to understand what you were doing. Attached is the page from Universal showing how to hook up water heater.
Good luck.