This is my first time posting to the forum. It looks like a tremendous resource!
Help! I have a 1968 or so rebuilt Chrysler 318 in our houseboat. All are in great shape, except the engine has developed an issue with extreme air in the water discharged from the thermostat and then overboard. I made some illustrations to explain my problem. I also replaced hoses with clear tubing for testing purposes so I could see what was going on.

First, I'm showing the basic setup. River water enters through a strainer... to an intake water distribution manifold... to a two chamber raw water pump... to the engine and manifolds. The light green lines represent the manifold cooling. Purple lines represent engine cooling. And, the cross-hatched purple lines represent a hot water recirculating loop used when the engine is cold.

The thermostat at the output directs water to the manifold exhaust and out the back of the boat when the engine has reached operating temperature. At startup or when cold water is directed through the recirculating loop, from the engine to the Intake Water Distribution Manifold, back through the pump, and back to the engine.

My problem is that the engine is injecting a large quantity of air into the cooling water.
The problem is amplified when the engine is cool because the thermostat diverts water with large air bubbles through the recirculating loop and BACK through the engine. Now there's even more air.

As a test, I removed the thermostat and BLOCKED the recirculating loop hose. Water from the pump to the engine was now clear. Water exiting the thermostat chamber had some air that went to the manifolds and out the back of the boat.
Where is that quantity of air be coming from? How can I fix this? Any thoughts would be MOST appreciated!!
Help! I have a 1968 or so rebuilt Chrysler 318 in our houseboat. All are in great shape, except the engine has developed an issue with extreme air in the water discharged from the thermostat and then overboard. I made some illustrations to explain my problem. I also replaced hoses with clear tubing for testing purposes so I could see what was going on.

First, I'm showing the basic setup. River water enters through a strainer... to an intake water distribution manifold... to a two chamber raw water pump... to the engine and manifolds. The light green lines represent the manifold cooling. Purple lines represent engine cooling. And, the cross-hatched purple lines represent a hot water recirculating loop used when the engine is cold.

The thermostat at the output directs water to the manifold exhaust and out the back of the boat when the engine has reached operating temperature. At startup or when cold water is directed through the recirculating loop, from the engine to the Intake Water Distribution Manifold, back through the pump, and back to the engine.

My problem is that the engine is injecting a large quantity of air into the cooling water.
The problem is amplified when the engine is cool because the thermostat diverts water with large air bubbles through the recirculating loop and BACK through the engine. Now there's even more air.

As a test, I removed the thermostat and BLOCKED the recirculating loop hose. Water from the pump to the engine was now clear. Water exiting the thermostat chamber had some air that went to the manifolds and out the back of the boat.
Where is that quantity of air be coming from? How can I fix this? Any thoughts would be MOST appreciated!!