150 Timing and Idle

[tortugapr]

I have a 1998 striper with twin Yamaha 150 salwater series. The problem I have is with the idle and timing of the motors. When I purchased the boat I performed preventive maintenance on the engines which included, new fuel lines, separators, priming bulbs, fuel pumps, carburator cleaned and rekitted and spark plugs. I proceed to adjust the timing and idle as per the engine manual. Set the engine at 23 BTDC and at full advance align the marks of the pulser coil with the correspondent mark in the flywheel. Move the engine to 7 ATDC and at full retart adjust the pulser coil with the flywheel mark. Each pilot screw of the carburator set to 1 1/4 turns and then adjusted the idle set screw. I adjusted the engines out of the water with earmuffs at 1000 rpm so that in the water it would hit the target of 700 rpm with the water creating backpressure in the muffler. The problem I have is that the rpms dropped in the water down to 400 - 500 rpm. When I try to increase it by turning more the carburator idle set screw I cant increase the rpm. The only way they stayed on and increased the idle was by turning in the full retard timing screw ( actually advancing the timing at idle).

Any ideas. Could the water be creating too much of back pressure that it is choking the exhaust?

Thanks in advance for any help or advise.