Mercruiser 120 loss of power at Full Throttle. Please help

[Catfishcabin]

So yesterday I was going across the lake at Full Throttle 4000 RPMs and all the sudden my RPM started to drop all the way down to 2500. I put the boat in idle and turned off the key comma after that I pulled the motor cowling off and it does look like the motor is overheating a little bit so I will be doing the new impeller and it was slightly low on oil so I topped it off. I went ahead and fired it back up and it runs fine it just will no longer go above 2500 RPMs but when it's in neutral and I used the neutral throttle lever I can get it up to 4000 RPMs so I'm guessing it is the throttle cable attach to the shifting lever? Any other ideas

 

[alldodge]

Getting hot can do several things and the most common is blowing the head gasket or warping a valve. If either happened, then your not developing power on all cylinders. Do a compression test