There is no way the FAE caused the failure of a rod or bearing. As mentioned the back pressure is nil while under way with the FAE. I don't want to get all scientific and what not (Civil Engineering Degree lots of fluid mechanics) so lets just keep it simple. Will some back pressure be created by reducing the output are from the 2-1 when compared to the original specs without FAE, indeed. At rest there is no question the air flow is restricted a bit. Is this enough to cause harm to an engine? Give you performance issues? I would think you would see way more engines blown up if it did. Fact is it doesn't. I am speaking here in regards to a standard 5.7L V8. Is the restriction enough to cause noticeable performance differences? I would say if you hook the boat up to a machine and read its values there would be a definite difference in air flow and back pressure at rest/idle, but it would end up within the acceptable level. Also now stick that same boat into the water and the results will also differ. Now lets talk about when you get under way..... that back pressure is actually reversed and in simple terms. The flow of water passing the FAE now pulls the air flow through like a vacuum sucking exhaust out while moving thus increasing air flow. This helps compensating for the 2-1 reduction at higher speeds when more air/exhaust is being pushed through from the engine and being "sucke out" at a faster rate by the FAE. The open air without the FAE does not have the same effect while on plane.
Maybe some of the engine gurus can chime in, but these engines all have computers scanning and using all the data making tiny adjustments to optimize performance. I am thinking the small reduction the FAE causes at rest would be able to be compensated for by the computer. Kind of like operating a boat at high altitudes. Just because you are way up high doesn't mean you recode you entire engine. It makes the adjustments to perform at the consistent level its at. This is all just my pure speculation on the computer adjustment stuff.
I have logged over 2000hrs on my personal boats, all of which had FAE with ZERO performance issues. ALL 5.7L V8's. 750 out of the 1100 alone on my current Indmar LTR with FAE. I think your dealer is just looking for "an out". Anything that is aftermarket or added on to something will always be the first thing they blame.
2000 X-Star, 3000lbs ballast, LTR 330, Acme 1235 14.5X14.25prop.