Clarification of Selling Party
The selling party was not the dealer, but an individual. I retained a dealer / marina to perforrm the Used Boat Inspection to make sure the boat was in good condition. The dealer has told me the inspection comes with no guarantees or warranties. This seems rather silly since I paid the dealer $350 to perform the inspection.
The impeller issue was noted on the inspection but nothing was said about not running the boat until the part was replaced. This seems rather strange given the potential long term damage that can occur from an overheated engine. The temperature gauge was pegged to the top when I finally noticed the problem.
The inspector also missed a malfunctioning alternator when he performed his inspection. The alternator produced adequate amps when in neutral, but amps decreased when the transmission was shifted to forward or reverse. Thankfully the problem was solved by cleaning the leads from the alternator to the engine.
Buying a boat comes with risks to the buyer. I spent money on the UBI to reduce these risks. The process has turned into somewhat of a circus with all of these issues.
Thanks for your help.