I honestly don't know myself the technical functions but I assume that the water must come in through the exhaust and with a screwed up exhaust pulse the water ends up getting sucked into the cylinders durring the overlap. I could envision that when one cylinder is supposed to be pushing exhaust out and it is not there is a low pressure area that would tend to suck air and moisture from somewhere else. Again, I am only guessing here, but I know that there is an exhaust pulse that is intended to help scavage burned gasses from the cylinders and this can only happen by creating a pressure differential in the exhaust system. I know I tend to heed Duane's advice cause he carries good credentials with him.
In the mean time I am looking at locking nuts for the rocker studs. When I mentioned that they were only finger tight, I mean the nuts easily spun up and down the threads of the rocker studs. Even I know that isn't supposed to be like that.
I have decided to put my top end together right and see what happens. If the cam is goofed it won't do any more damage that there is now The Bottom end was not making any noise. and I had good oil pressure so if this fix gets me on the water for a little while I can evaluate what else needs to be done to get the whole boat sorted out. As it is, I have had this thing wet for a total of about an hour and a half and that includes loading and unloading from the trailer.