If I could re-title this thread:
"Ridden Hard and Put Away Wet - A Case Study in Exhaust System Failure"
First a glance and BE History - I joined around 2004 and was asking questions about our 350 SBC MerC and Charlie was the first reply I ever had on this forum. Since then I've learned that if you ask Charlie what's wrong with your SBC you need to have Pen and Paper in hand. When Charlie answers, you might as well order parts before you put a wrench to it. In this case, Failed Joint, Between Exhaust Manifold and Riser, in this case Starboard Side.
I've lost track of the progression of this issue but I think:
1. Boat was out of service for months, maybe winterized. This allowed time for trouble to brew to full strength.
2. Vacuum and/or Compression and/or Blow-Down Cylinder testing was suggested. Doing this would have moved the Carburetor, Base Gasket and Fuel Pump to the bottom of the suspect list.
Seems water got to the valve guides in both center cylinders, exactly what Charlie mentioned. Most likely source is wasting away of the gasket surface between Manifold and Riser. Or "Spacer Block" if your boat uses those. (Ours does, so add $200 to cost of Exhaust Job...) Then the Valve Stems rooted themselves to the Guides with rust and the running engine bent the pushrods till they broke.
From the pix (great pix, clicking on the photos' URL's displays them full screen) I don't think the Pistons are damaged, and all the Valves look like they aren't bent or missing pieces. If the wettest (from water) cylinder bores aren't rusted, my guess would be the Block is salvageable. Heads too, but it might be cheaper to get Rebuilt or even New ones. The pre-Vortec heads are cheap!
Yes, you CAN go to Vortec heads and get more power but now you're adding an Intake Manifold to the mix. I've heard but can't confirm that Vortec heads are prone to cracking, so I'm not as sure I want to upgrade as I used to be. Wondering if anybody can confirm that...
I'd suggest cleaning up the Block's Head Gasket surfaces, the tops of the Pistons, and carefully inspect the Bores. IF they're all OK, then my worries turn to the Camshaft. If you go with the your present Block, I think you'll find you need a Cam and a set of Lifters. It's my belief you'll find the pressures it took to break those pushrods damaged the rubbing surfaces of the Lifters and Cam Lobes. Those parts have only a surface hardness, so if they look marred, it means they will wear very fast. That'll create valve lash that you can adjust out because the SBC has adjustable rockers, but the wear will continue till you have parts of lifter and camshaft in your oil filter and you'll be back to a miss.
For me, the keys to this are Pistons, Cylinder Walls and Head Gasket Surface. If that Block has to come Out, Apart, and/or Machined, my opinion is get a reman long block.
And I'm pretty sure you'll find, if you haven't looked yet, that the "wet joints" between exhaust manifold and riser are shot. So an Exhaust Kit too.
Hate to be Bearer of Bad News, but I've also learned Bad News only gets Worse with Age.