Gator, a lot of the talk on here is about gearboxes (mostly) and belt drives (I run one) ..... and then there are the guys that run the DD Caddies and they seem to have more fun than any of us.
I think a DD smallblock could be a very cool little boat. I've never owned one, but Water Thunder is building one so that tells me that the days of a DD auto motor are far from over.
What I do know is that you'll want to keep it light ..... probably a 2 seater around 12' long, and plan on running a two blade carbon fiber prop if that's in the budget so that you can tune for maximum push.
You'll need a different cam. Something with around 106 degrees of lobe seperation (Comp Cams in Memphis can do it) because you'll basically be turning an auto engine into a tractor motor. Torque is your friend.
Go for it. and let us know how it turns out.
olf