The foam particals are probally the floation aids under the bow. Some have foam chunks, some have air bags, some have bags filled with foam balls, like a bean bag chair.
My headers get red hot, I do not run water through them. I will on the new ones.
The gas issue, I have only done that once or twice.
Take a reading on your spark plugs. They should not be white.
I would put a diverter on it 1st. You can trim out the boat, and make a good looking roost.