Finally got a chance to do some extensive troubleshooting while having a friend drive the boat. Drove the boat at about 2,500 while pouring some water down the carb (I can hear the groans now!) to decarbonize the engine, no luck still detonating. Double checked the timing again, set the mixture and adjusted idle, still detonating. Then started looking around and listening to engine to see if the detonating could be isolated. Found water spurting out of #1 cylinder head lower bolt and a little out between the head and block. The water spurting out of the head bolt was hitting the back of the alternator and was making a sound like detonating.
My friend helping me out had his son with him so had his son torque the head for some experience; in retrospect should have done it myself. Dont have a Indmar manual so use the PCM manual dowloaded from the Mastercraft forum. Torque value for the cylinder head bolts was listed as being step torqued @ 90-100-112, when he went to 100FTLBs the bolt snapped. Thinking if it was me torquing it would have felt bolt stretch and would have known to back it off. Valuable lesson for both of us, him to know what stretch feels like before letting loose and for me not to have done this crucial step myself.
Has me curious as to whether the torque I got out of the manual is correct. Standard torque table for a 1/2-13 bolt was no more than 60ftlbs, with a note saying that if other specific torque was specified to use specified torque!
Hoping that I can easy out the bolt left in the block by using a left hand bit and lots of penetrating oil and prayers!
Not sure if this is a common problem for the head bolt on #1 to loosen like that. Engine had steady vacuum at 15 with no oscillation so thinking the head gasket sealing #1 cylinder is intact.