94 Mercury 2.5 XRI 175

I have a new to me boat with this engine.  When I get the boat on plain, after a few minutes, I get they sustained temperature alarm beep.  If I power down, the alarm quits and the temp gauge goes normal.  I can putz around for hours and everything is normal.  I've blown out the lines and made sure it has a good stream of water coming out.  I also re-primed the oil.   What's next?  Water pump, impeller, etc.?

Good deal, glad to hear your back in business!

Thanks for all the helpful suggestions.  I had the water pump and impeller replaced.  Also they found the "plate" was a tad melted.  I bought it from a private party, so you never know all the history.  Took it out for the first time this evening and it ran like a champ.

Had this problem in the past I could not stand the buzzer so I cut the wire and fished the rest of the day which was dumb. So I took it in it was the impeller/water pump they replaced the water pump/impeller and also the wire was fixed. The impeller doesn't last if you go through Sandy shallow water like I was on the Mississippi also if it sits for awhile the impeller will dry rot and rubber from the impeller can break off which will cause more problems. Since my first overheat from a bad impeller I just replace it every 4-5 years. Have not had a problem since. Replacement is easy diy.

I would say water pump and impeller. Just had the same issue with my 93 150xri.

I'd start with the water pump,  and change it  all.

The tell-tale stream just proves that water is leaving your water pump, not necessarily that it’s moving enough water to cool your engine. 

I had the same issue with my Mercury XR6.  I could go half throttle and last all day long. However, a couple of minutes at WOT, and I’d get the overheat alarm. I replaced the water pump, and got the same result, so I brought a temperature gun out with me. Sure enough the motor was overheating, even with a new water pump. Pulled the water pump a part again, and replaced the entire housing that it sits in, and that did the trick.

When your impeller starts going, it will still pump water, just not as much as it should.  The higher RPM your motor is, the more water it will require for cooling. 

Your issue is very likely to be the water pump. Typically when the overheat sensor fails, it fails! The fact that yours trips, and then cools down, suggests that it is likely functioning as designed.

http://www.bbcboards.net/showthread.php?t=696131

Forum discussion on alarm issues. Few other things you can check. 

It takes a few minutes, maybe 2-4.  It was confusing that I had a good steady stream and after powering down it was fine.  Thank you, I'll take a look.

Sorry to hear the issues your having. Not sure you have a water cooling problem there. Good stream atleast points you got water moving thru the block. 

Does the alarm sound shortly after dropping the hammer or does it take some time to go off?

Track down the temp sensor wire on the engine. Check to see if that looks in order. Don't recall if it was a brown or purple single wire. Long ago I had an early 90's 200 merc and had to replace the sensor for the same symptoms you described.