I would not expect the water circulating pump to have such an effect. First off, lets make sure we are talking about the right pump. The circulating pump is the one that is identical to what cars have. The pump is mounted aproximately center on the engine, directly above the crank pulley, usually has two belts that drive it along with other devices (alternator and raw water pump). The Raw water pump mounts off to the side, generally low. One of the hoses on this pump leads directly to the bottom of the boat where it sucks up water from the lake. The raw water pump uses a rubber impeller that will wear out. When it wears out it will stop pumping water and the engine will overheat. You should be able to see all sorts of signs of overheating: the boat gets louder (due to loss of cooling water in the exhaust), the temp gauge should indicate hot, the motor should start to smell hot, and you could be creating clouds of smoke around the engine. The circulating pump will often last forever. As long as the pump will turn it will generally pump water. The most common failure mode is that they will start to leak, which in a car is a problem because you lose water so fast but on a boat you have the whole lake so a leak just means that your boat fills up with warm water. The second failure mode (which often closely follows a leak) is that the bearing fails and then very bad stuff happens. When the bearing fails the pump tries to stop turning, but since you have 300 hp insisting it does turn things get a little noisey, belts break, lots of noise, etc. The only signs that the ciculating pump is on the verge are leaks and squeaking noises from the bearings (which wouldn't be reverse/forward depenedant). The raw water pump is something that you should plan on replacing every so often so the previous owner/mechanic might know that it had been a while and thus it needs to be changed. Like George said, it is possible that the raw water pump failed, the engine overheated and put you in "limp mode". This should have been fairly obvious though, as the limp mode is triggered by the temperature and/or oil pressure indicators telling it that bad things are happening. If the computer can see it, so should you. I suspect that there is some other problem, probably fuel related. Have you tried changing fuel filters?
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