You could have any number of reasons that happened. I don't think it was ethanol though. Ethanol has been in gas on the west coast for quite some time. (MTBE was banned in 2000 or so and replaced by ethanol) Leave any oxygenated gas in the tank for more a year and you could get detonation problems.
Have you ever replaced your riser gaskets?
Instead of rebuilding that engine, You might be better off with a long block engine. either way it's not going to be cheap.
http://usengine.us/marine.html provides marine long blocks and you probably have similar places in SOCAL that have similar deals.
Whether you replace or rebuild you probably should also replace the exhaust manifolds and riser/elbows if there's any question about them. (If you've never replaced the riser gaskets you need to break them down and have a look. Leaking riser gaskets will allow water back into the cyls thru open exhaust valves immediately after shutdown.....if that happens right before you put it away for the winter or other long period of time the water sits in the cyls until you start it.
Good luck,