thanks again for the input into my problem. We after burning off about 30 gallons of fuel (2.5 hrs at 70% throttle), I went to the fuel pump. I started pumping slow and could see gas spilling out of the interior vent tube and back into the main fuel hose (as noted before the interior vent tube is about 1/2 inch down into the fuel input). After about 5 or so gallons, the vent tube started spitting out quite a bit of fuel to the point where I had to slow down fueling the boat. Then after another 5 gallons fueling started to go normal (but fuel did continue to come out of the vent tube the entire time I was pumping fuel into the boat). I ended up putting 100 gallons into the boat (so back when it was backing up and not going down, the tank still had room for about 70 gallons of fuel - Yet the gas was level with the top of the fuel input like it was 101% full).
I have reviewed the fuel tube diagrams that came with the owners manual and am still surprised at what happened. But the good news is that there appears to be nothing wrong with the Grady, just got to be more careful when filling up the boat using gas containers.
I do wonder if the vent tube is longer than it should be, but if I don't have problems in the future (being careful not to get gas into the vent tube), sounds like I am good to go.
thanks again for all the feedback!
Rick from VA.