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First time post, i did a search on overheating under sundowners and not sure i found a good match to my experience. I have had two experiences where my temperature gauge pegged to 240. First time it happened was when i was traveling down the river creating no wake, it started to rise in temp, not quite 240 and then plumes of smoke came out of the outboard drive. shut it down, and after about 15 minutes or so, started it up again, traveled at a higher rate, minimum wake, and it never happened again. However, after taking it back to dock, i checked the impeller and found it to be in great condition. I keep it in the river, and someone said it might be some of the river gunk and that i should run it in reverse and forward a few times to clear it out. Then two weeks later, i took it out to the bay and beached it at the sandbar. It was really wavey and the boat rocked a few times and did hit the sand bar two times and the water was full of sand. We decided to leave after an hour or so for calmer waters. the boat started up, and after we raised the anchor, i tried to give it more throttle to get out the waves and away from the sandbar, trim was up...noticed the temp was pegged at 240...give it a bit more throttle and it then just shutdown on me. i lifted the engine cover and smelled burnt rubber or plastic, couldn't tell at that time and some plume of smoke came up. Engine wouldn't restart, it would crank but the pulleys wouldn't turn. I had my friend tow us back in to the mouth of the bay, about a 20 minute tow ride. during the tow ride, i checked all the wiring for any burn marks (plastic smell) nothing, engine did not feel like it was overheating, felt like a normal running engine temp. I checked the belts, nothing out of the ordinary, but i did notice in the engine compartment some rubber shavings on the port side, quite a bit, but we noticed that when checking the impeller the first time, nothing new. Ran my finger over the belts and some rubber dust was on my finger but not a ton. Once we got to the channel, we tried to start the boat again. it cranked, pulleys turned not even a full turn, maybe a 1/4. Tried 2 more times, each time a little more turns until it started back up again. Temp was fine, then i ran it maybe 50 yards with 1/2 throttled....and then drove it down the river for 45 minutes, no wake and wake zones, and it the temp gauge remained at normal operating level 145ish.

So with the impeller in good shape. Any thoughts what else could be the cause of this? Thermostat not opening at certain points? Water pump going bad?

First off, welcome! Always like to see more Sundowners joining up. As to your problem, I would start at the drive and work your way thru the cooling system. Make sure the intake holes aren't plugged with gunk or sand. If you have the ability to take her out of the water and run on muffs, that would let you see the water going in and coming out. Replace the T-Stat (they are cheap and easy to replace). You said the the impeller was good. When was the last time it was replaced? They have a tendency to become "set" in one position and become ineffective in moving water. Get an IR Temp gun and get readings on hoses, manifolds, intake, etc.

The burnt smell you are smelling is the rubber pieces of the exhaust that are after the exhaust manifold. Check these over carefully, they don't like high heat for extended periods. And the belt dust could be from a bad recirculating (water) pump. If it has gone bad/seized, there should be water coming from the weep hole on the front.

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1996 205 Sundowner DLX
5.0FL Volvo SX Cobra
Tow Veh: 2012 Nissan Frontier Pro-4X

You have a '94, this could be either the all OMC Cobra, or the joint venture OMC/Volvo system...is the impeller on the engine, either in the crank pulley or driven by a belt? Then its the joint venture product, if not, then its the all OMC model with the impeller in the upper gear housing on the drive...
A couple of things....on the all OMC models, there is a plastic screen in the lower gear unit for the water intake, that you can get marine growth in and that will cause reduced water flow. I had this on mine and wound up taking the screen out. Its a hold over from the OMC outboard lower units and works fine on them because OBs tilt out of the water. The joint venture product has no screen, but you can still get clogging in there, you can rod out the holes but I found that I had to split the upper and lower drive units to clean it all out.
Another thing, if it did not crank over, or very reluctantly, it could be hydrolocking, you want to know if this is happening so I'd take out the spark plugs and see if there is rust on them. You can crank the engine over with the plugs out and see if water shoots out the plug holes. Of course the slow or no crank condition could also be a weak starter/battery/corroded electrical terminals.
Lastly if there was smoke coming out of the engine compartment, the rubber for the exhaust hoses was starting to melt. If it got that hot, the exhaust flappers, (if it has them, not all do) probably melted and may be blocking the exhaust.

If the boat is left in the water, clogged water intakes can be a more or less chronic problem, either from sand or silt or marine growth. This is one reason why outboards are better for small boats left in the water. It is just not a problem for them.

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88 Four Winns 200 Horizon
4.3 OMC Cobra-4bbl
2002 Walker Bay 10/2012 Suzuki 2.5
2008 Walker Bay 8

1998 Jeep Grand Cherokee 4.0/Selectrac
2007 Jeep Grand Cherokee 5.7 Hemi/Quadradrive II