I'm in the middle of re-doing my whole hull-deck joint. There are some pics in the thread referenced above. When I pulled my rubrail, I found large gaps in several places that were obviously allowing water in.
One of the peculiarities of the hull is that water is constantly driven up into the bottom of the joint along the last couple feet of the sides, and around the transom corners. Take a look sometime when you're running on plane -- it's like holding a high-pressure hose on the bottom of the rub rail.
Based on what I've seen on my boat, I'd say there's a good chance some or all of your water intrusion is coming through there. I'd recommend pulling just a little bit of your rubrail to see what's going on. It's fairly easy to just remove the end caps near the motor and peel back a few feet on each side. Easy to put back too, as long as you don't take it past where the joints are on each side.
At least the way mine is put together, just running a bead of sealant between the rubrail and the hull doesn't do much good. You need to actually seal the joint between the two pieces of the boat, not between the rub rail and the hull.
I also have some minor stress cracking in a few spots around the transom area. The transom feels plenty solid though.
About the motor height, my 50hp is mounted in the second-from-highest position. (In other words, the bolt is through the second hole from the bottom.) I moved it up there from the lowest position myself, and I have no ventilation issues with a 4-blade stainless prop. If your transom has been altered, it's hard to say if the engine is exactly the same height. I'd say my cav plate is maybe 1" to 2" above the top of the tunnel, but it's one of those things that's hard to measure accurately.
What motor are you running?
