Pulling the boat-engine problem

[Van]

Went out today for quite a while. Went all the way to the NW corner.
I noticed some noise from the OB on the way out but not too bad.
Trolled for a while then when i started back home, I could hear what I describe as knocking. It went away if I kept her under 3500 rpm.
Also noted the temp gage pegged, but the engine was not overheating. The alarm never wnet off.
When I got back to the slip. I lifted the cover and saw water in the pan. There is a hose split towards the back of the powerhead.

So maybe the water shorted the temp sensor wires. That could explain the gage, but what was the knocking sound? And she ran pretty rough at higher rpms. I will check the plugs and change the filter tomorrow (on land). Run it on the hose and see. Hope its not serious. There is still plenty of fishing season left.

Any thoughts are welcome