water pump problems?

[confused]

I have just bought an 88 rinker with a 5.0 litre mercruiser, or so I think. Air breather says that's what the motor is but seller said it's a 305 chevy motor. anyway, my problem is this: I took the boat out on the water for the first time this past saturday and it didn't turn out good. After 5-10 minutes the motor started smoking bad, I found that it was not sucking the water in to the motor from the lake like it should. Upon further investigation I have found that the pump at the lower unit is working and pumping water in the first little bit but for some reason the motor is not picking up where it leaves off. my questions are: what could cause this to happen? and Did I ruin the motor by running it with no water in it? I was told the motor was just replaced summer before last and wasn't ran last summer at all. If anyone has any insightinto what I am looking at please let me know. This is my first boat and I know nothing about them. I am an automotive mechanic but not sure how much boat motors are like car motors. PLEASE HELP!!!!!