That is the reason we close the seacock when running with the generator not running. When underway with the generator running, exhaust pressure keeps the raw water from backing up into the exhaust valves. The exhaust is raw water cooled, whereas the block is cooled by antifreeze/water mixture by way of a heat exchanger. I'd run the generator alot to clear the water out of the cylinder and flush the engine oil until it is perfect. Thanks for posting, it is a lesson for us all! Sounds like you dodged a bullet!