Actually I think you are ok. Most likely you blew a hole in your wear ring. So what little water the pump was producing was exiting the hole you blew and not making enough thrust to feed into the water inlet that feeds the water cooled jackets for the exhaust. That water is forced in by the pump itself and then exits back out of the actual exhaust. I am almost positive if you replace that wear ring it will take care of your problems on all aspects.
You could test this theory by just doing a fresh water hook up and act as if you were to flush the ski. If its running for a while out of the water on the hose and no alarm then you know its the intake from the pump. If it still alarms then might be something else.