Re: In the water
Will it not idle in gear at all with the prop in the water? What kind of spark plugs, how old are they and how do they look after she's been idling?
Sounds like fouled carbs. How long did it sit unused?
Your carburetors have three passages: idle, intermediate, and hi-speed. If you get one or more fouled hi-speed jets, it'll idle all day long but won't accelerate. Actually, it'll sound surprisingly good idling on two cylinders. Especially with no load on the prop.
That motor needs to be cranked & idled up to operating temp every few weeks, or winterized if you don't boat in the wintertime. Gas turns to varnish in the carburetors. Seafoam or stabil added to the gas helps.
Before you rebuild your carbs, couple things you can check:
A compression test would be a good idea, no sense pouring money into an engine with bad compression.
And make sure the timer base moves smoothly without sticking.
Revving your motor up on the muffs is a very very bad idea - just enough to keep it running while it warms up, then at idle. Otherwise you risk thermal runaway.
Also, heed tashasdad's words about running the water pump dry - the pump is pumping while you're cranking, and it'll heat up in very few seconds.