You are correct the oblong ring fits into the top of the y pipe and they also have nubs sticking out on the sides that fit in the holes where the bushings were. You have to make sure those nubs are seated or the assembly can pop back out.
I put a set of the new style flappers in my 89 Stingray with a 350 mag this summer. They don't seem to fit at first because they don't move as freely as the old style one. You have to make sure the pins are snapped into the holes in the y pipe or they can pop out when the exhaust hoses are...
You say you changed the fuel filters but does your boat have the fuel filters on the bulkhead in front of each engine? My 330 has these filters, the fuel water separators and the in carb filters. Just a thought.
They were carbs, rated at 250hp. My guess is the fuel injected engines are rated higher. If I were you I would sea trial the boat and see how she does! I have a friend with a 32' St. Tropez with 454's and I run with him all day no problem.
My 1994 330 with the 5.7's always performed flawlessly. Never used the tabs to get on plane, easier maintenance access, didn't matter if I had two aboard or eight, still ran fine. I would not hesitate to get one with the small blocks. Just my 2 cents!
"I have had water leak from both the shift cable bellow and the exhaust bellows"
Water will not leak into the boat from the exhaust bellows, but the y pipe seal will leak into the boat. Try to tighten the transom bolts the best you can, probably only be able to get to the bottom 2 and the top...
+1 on the trim limit being the culprit. It's a pretty big job to change, basically have to take everything apart just like you were changing the bellows. I would jumper the wires at the trim pump where the trim limit plugs in so your trim switch works and just watch your trim gauge until you...
It's #10 in this diagram.
http://www.mercruiserparts.com/Show_Pictures3.asp?dnbr=17468&ivar=images/COMMON/39266.png&inbr=951&bnbr=90&bdesc=FUEL+PUMP+AND+FUEL+FILTER
I had a very similar issue last year and it ended up being the voltage regulator. http://www.outboardignition.com/mandmsearch.asp?cat=itemname&cval=5&hval=38&val=13